An RFID Explosion?

There are lots of obstacles in the RFID industry. However, one of the key problems is that many industry watchers are looking at � and predicting (often poorly) � when the "hockey stick" growth might happen in RFID adoption. But, what if it never comes? Does that mean the technology is a failure and won't be ubiquitous? Hardly.

ThingMagic's Kevin Ashton and I spoke about this subject a while back. He espoused a theory that � and I'm paraphrasing here � nothing really large, with sustainability, experiences explosive growth. Sure, there are periods of high growth compared with other periods. But there is no off-the-charts growth followed by continued adoption and a steady incline.

Think about it. RFID is most often compared with the adoption of bar code technology. But, there was never an explosive adoption period where almost all companies fell in line and deployed bar code technology. In fact, most companies slowly deployed bar code printers and readers to a handful of business processes and then studied the results. The companies learned from the limited deployments and applied that knowledge to larger bar code initiatives. Even today, companies are still implementing bar coding in warehouses and distribution centers. Had there been hockey stick growth and massive adoption years ago, the growth rate in bar coding would be flat in today's environment. However, that's not the case. The industry still enjoys a growth rate of just under 10% per year. And, that number is higher in other areas of the world, such as Latin America.

While many people eschew the comparison of RFID and bar code technologies (e.g. the oversimplified statements that RFID tags are like "bar codes on steroids" or that RFID is "just another data collection technology"), this may be one instance in which the two are similar.

Steady RollOut Proves Technology
The EPCglobal US Conference last month didn't have the same buzz that the event garnered last year. But, it did replace a lot of the hype from 2004 with real world applications of RFID in 2005. For instance, Best Buy is working with ADT and Oat Systems on an RFID pilot project of its own. Publix grocery chain is teaming with the University of Florida on an RFID project with several of its perishable goods suppliers. A handful of the early Wal-Mart adopters announced plans to further expand their RFID initiatives. In the background of these larger projects, system integrators discussed their clients' plans to roll out RFID beyond the level of slap-and-ship.

Once again, there was no explosive growth to report. That may come as a disappointment to some. On the other hand, however, there was significant work being done with RFID that will continue to drive the industry forward.

It may be true that no industry can experience rapid adoption and then continue to grow on an annual basis. RFID will probably be no different. But for the industry watchers and technology vendors with investments on the line, it would be nice to start a period of high adoption. All signs point to that happening in 2006.