From The Editor | December 18, 2007

2008: RFID's Year?


RFID's (radio frequency identification) impact on enterprises and consumers will be game-changing. But, can you keep score on an annual basis?

Integrated Solutions, January 2008

At RFID World 2007, I recall speaking with Alien Technology's CEO George Everhart about the growth of the RFID industry and when we could expect to see significant growth. (Not the hockey stick growth that everyone is anticipating, but some serious movement in the right direction.) He likened the current RFID space to the then-burgeoning wireless industry of a decade ago. Everyone agreed that wireless technology was a disruptive technology with almost limitless potential to impact enterprises and consumers. January after January, however, vendors and pundits would claim the upcoming 12 months to be the 'Year Of Wireless,' only to be subsequently disappointed with the adoption figures.

Look at wireless technology a decade later. It's transformed enterprises and consumers. It's a pervasive technology that — in retrospect — was probably undersold in terms of its overall impact on business and society. Yet, for all of the 'Year Of Wireless' predictions, you'd be hard-pressed even now to name the 'Year Of Wireless.'

What does this have to do with the growth of the RFID industry? Well, it's pretty instructive in terms of predictions versus reality. Also, it demonstrates that technology can grow to a point of pervasiveness without an agreed upon, identifiable tipping point. That's where we now find ourselves with the adoption of RFID technology. Many involved in RFID will label 2008 (or 2009 or 2010) as the 'Year Of RFID.' They will, of course, be wrong. There will be no 'Year.' Instead, we will one day wonder how RFID came to impact enterprises and consumers so dramatically without most people even noticing.

The Road To RFID Pervasiveness
At this point, I should clearly state that 2008 will not be the 'Year Of RFID.'  It will, however, be another significant advancement down the road towards RFID's pervasiveness. Looking at analyst reports, you'll see that RFID is being implemented in a diverse set of applications. Deploying RFID for 'compliance' and 'mandate' initiatives has been replaced by deploying RFID for continuous improvement initiatives. Orders of RFID tags and readers are on the rise. R.W. Baird's October 2007 RFID report sums it up this way: "We are aware of tag orders exceeding 1 million units in some cases and reader orders in the 50 to 100 unit range. By way of comparison, last year 5 to 15 units was a good reader order, and tag orders exceeding 50,000 units were considered large."

In 2008, you can expect RFID's influence to expand. Asset-tracking applications will continue to be a key growth area. Retail supply chain and in-store retail applications will leverage RFID in new projects and increase its use as 2007 projects turn into deployments in 2008. The pharmaceutical industry and homeland security will push for RFID as a technology that can deter counterfeiting and increase security. All of these applications and initiatives will largely use passive RFID technology. I haven't even mentioned applications and growth areas for active RFID tags and battery-assisted RFID tags. Each of those technologies is expected to enjoy an even higher growth rate than passive technology. (However, both active and battery-assisted technologies have a smaller base of target applications and customers.)

I've said for years that RFID will someday be a pervasive technology. And, I stand by that claim. This will not be the 'Year Of RFID.' One day, however, we will look back at how RFID has transformed the activities of enterprises and consumers, and we still won't be able to single out a year where it all changed.