RFID market defies downturn

Despite the depressed state of the economy, especially in the crucial retail and automotive sectors, new data from ABI Research has found that the RFID market is not contracting but instead growing at a slow but steady rate.

ABI believes positive signs are beginning to appear in the market and forecasts in Semi-Annual RFID Market Data that, the ailing automotive market notwithstanding, the RFID market will experience 11% growth between 2009 and 2010. Moreover, without what ABI says is a deeply depressed automotive market, the growth rate rises to almost 16%.

“Transponders, readers, software, and services are all showing healthy growth,” commented ABI practice director Michael Liard. “The most robust applications include contactless ticketing, contactless payments (particularly in North America and Europe), item-level tracking in fashion apparel and footwear, asset management (not only corporate assets, but also returnable transport items, tools/parts, and work-in-process), baggage handling, real-time location systems (RTLS), and electronic identification documents.”

Even though e-ID documents experienced some decline in 2008-2009, as a result of the winding down of China’s national ID card programme says ABI, the researcher expects the sector to rebound in 2010 due to increased numbers of passports being issued by dozens of national governments. It identifies other high-profile government e-ID initiatives such as border crossing cards, RFID-enabled driver’s licenses, and electronic vehicle registration (EVR) as further drivers for growth.

Again, despite the  credit crunch, ABI expects retail RFID to blossom thanks to a boom in contactless payment cards in the US, followed soon afterwards by Europe. Asset tagging is predicted to show strong uptake particularly in corporate finance and banking, healthcare, and manufacturing environments, as well as in new areas such as energy, utilities and gaming, ABI sees continuing expansion in traditional rental asset management in areas such as library books and media.

“Based on sales growth pipeline conversations, our end user research, and RFID revenues reported to ABI, 2009 will likely not be as bad as many thought,” adds Liard. “Key economic and industry indicators point to stronger growth in 2010, especially the second half.”