Radio frequency identification (RFID) technology holds immense potential for businesses engaged in production, transportation, and retailing of products. Superior production efficiency, inventory updates in real-time, shipping and importing economies, greater product security and curbing of counterfeit products are among the numerous advantages of using RFID. It is due to these and other benefits ...
Radio frequency identification (RFID) technology holds immense potential for businesses engaged in production, transportation, and retailing of products. Superior production efficiency, inventory updates in real-time, shipping and importing economies, greater product security and curbing of counterfeit products are among the numerous advantages of using RFID. It is due to these and other benefits such as declining tag prices, greater end-user responsiveness and technological advancements that RFID is gaining widespread acceptance among various businesses for a wide range of applications. On the investment front, more than 40 percent of shippers have increased their investment in RFID technology for supply chain applications.
Over the last few years, the cost of the cheapest of RFID tags fell to just US$0.05, which is likely to further go down in the near future. The dwindling prices will help boost widespread adoption of item level tagging. The steep decline in cost of RFID tags is palpable by its mass production for widespread usage in tracking pets, and livestock, minute components in car assembly plants, and luggage at transit points. Consumer goods manufacturers have of late shown interest in adopting smart tags and the sheer size of the retail industry promises order inflows by the billions. Soon, these smart tags would replace bar codes in consumer goods packaging. In addition, government programs to replace plastic ID cards and paper passport with smartcards and electronic passports, which use contactless chip technologies, spur adoption of RFID technologies.
While growth in the RFID market will continue to be driven mainly by security and access control applications such as e-identification, and other government sponsored security projects such as passport security, and border crossing cards, growing penetration of RFID technology into other application areas in manufacturing, transport, animal tracking, aviation and commercial segments such as retail and textile is expected to secure the future of the RFID market. Tagging of animals is expected to grow strongly, as laws and regulations governing livestock, wildlife, aquaculture and pet care become more stringent. RFID devices will also make rapid strides into food safety industry in the short to medium term period. Epidemic outbreaks such as bird flu, and concerns over animal health, and food safety, which makes traceability and origin of animal meat a critical necessity, will boost market prospects for RFID in the food safety sector. With consumer awareness on food safety on the rise, RFID devices, which can provide traceability of food product over the entire food supply chain is expected to witness considerable growth in demand in food safety applications.
Use of RFID technology for product-tracking and inventory management especially has gained momentum over the last few years. This is because RFID tags and readers help retail managers in improving stock visibility, monitoring shipment in transit, managing product movement, tracking goods on-shelf and in warehouse, and tracing other valuable and often utilized items, thus driving better on-shelf inventory replenishment, reduction of wastage, improved productivity, and efficient logistics. Retail chains and malls are increasingly adopting the concept of ‘smart shelves', which enables consumers read related product information and other pricing data via RFID readers integrated in phones and other portable equipment. Although still in early stages of adoption in the pharmaceutical industry, RFID technology is slowly gaining in prominence in this sector. Regulatory demands such as implementation of e-Pedigree in supply chain, as mandated by California Board of Pharmacy will also generate substantial demand for RFID in the pharmaceutical sector. As pharmaceutical companies realize the pivotal role played by RFID technology in eliminating fake drugs in supply chain, demand for RFID hardware, software and services is expected increase. Aviation sector is another prominent area, where RFID is expected to gain momentum, especially for in-flight services, baggage handling, and cargo tracking.
Although developed markets such as US and Europe continue to remain the largest revenue generators for RFID, future growth in the market will be primarily driven by fast increasing RFID deployments in major countries such as India, China, Taiwan, Thailand and South Korea. Growth in these markets is largely attributed to the support extended by regional governments in promoting the adoption of RFID technology across various application areas such as transportation and national IDs. Increasing acceptance by private participants and falling prices of RFID hardware and software, will also increase market prospects further. Adoption of RFID in the region will increase further as success stories on early RFID installations emerge, and as customers begin to realize the benefits of RFID technology.
As stated by the new market research report on Radio Frequency Identification Technology, the United States represents the largest market worldwide, followed by Europe. Asia-Pacific represents the fastest growing regional market with a projected CAGR of 21.7 percent over the analysis period. Use of RFID in Security and Access Control Applications and in Manufacturing & Logistics Applications is expected to grow at a strong double digit CAGR of 17.9 percent over the analysis period.