Bob Trebilcock

A resurgent RFID

“RFID to become a $9.7 billion industry within five years.”

That headline from ABI Research caught my attention last week. So did the forecast from Michael Liard, ABI’s research director for the RFID and contactless market, who sees a market enjoying a 15% compound annual growth rate through 2013.

“These figures highlight an RFID market that is growing robustly,” Liard wrote in his report. “Across all product categories and flavors of RFID technology, market trends continue to be positive. We saw a strong finish to 2007, which continued into a healthy 1Q 2008.”

Why was I interested? While Liard is a proponent of RFID, he has often been an industry contrarian. “I’ve always been cautiously optimistic,” is the way he puts it.

For another, his research confirms a new energy I’ve sensed just over the last few months as I’ve talked to RFID providers and end users. This is anecdotal to be sure, but it feels like we’re seeing a resurgent RFID market. Manufacturers and distributors may not be tagging every carton and pallet that leaves the plant or DC with a smart tag, but I’m hearing about a lot of other interesting applications for the technology in manufacturing, maintenance and repair (MRO) and even document tracking. I’ll write more about those in the coming weeks.

So what’s going on? “Overall, the RFID market is quite healthy and robust,” Liard told me. “It’s just happening in different areas than we expected. Tracking corporate assets, yard management and MRO are very hot applications that continue to grow, and they’re growing faster than retail compliance.”

(Retail compliance, by the way, is a euphemism for meeting mandates from retailers like Metro AG, Wal-Mart, Sam’s Club as well as the Department of Defense.)

Liard sees another important change. While many people talked about the costs of the tags and infrastructure as barriers to RFID implementation, Liard said the real limiting factor may have been the way industry was thinking about RFID.

“The mindset needed to change and I think it has,” Liard said. “We began by focusing on technology to comply with mandates. The byproduct of that focus is that industry is discovering applications beyond compliance. I think end users are starting to realize that RFID can do a lot of different things besides track a carton and pallet.”

All of which might explain why many of the conversations I’m having with end users involve applications like tracking the location of tools that are critical to MRO operations or identifying the receipt at the loading dock of hot items needed to keep a manufacturing line running.

Those new applications are also leading to new tags and new form factors for readers. Just last week, I wrote about new developments on the tag front from Alien Technology. A few days ago, ThingMagic told me about the new readers and read/write modules they’re developing for applications like tracking documents and shopping carts. 

“It’s clearly a good time in RFID Land,” Liard said.

That sounds like more than cautious optimism to me. I’ll tell you more about my conversations with RFID technology providers and end users in my upcoming blogs.

Posted by Bob Trebilcock on May 27, 2008 | Comments (3)