The influential Gartner research group this week produced a report that suggests that 2008 will see a 30% increase in RFID revenues to $1.2bn. By 2012, the group suggests, RFID revenues will reach $3.5bn.
The research group says the market for RFID technologies has now begun to transition from being compliance-oriented to being revenue-generating and innovative, having moved beyond the mandates from the U.S. Department of Defense (DOD) and Wal-Mart where compliance with a retailer directive rather than business competitiveness was an underlying driver.
Now, says Gartner, innovation rather than cost is the driver for adoption (though that probably still won't stop some moaning about tag costs.)
The benefit, Gartner maintains, of this forced adoption of RFID actually created faster uptake than would have occurred normally within a technology cycle, though then uptake was followed by a delay in sales and in further adoption. (I guess this is normally what happens when a compliance mandate takes effect.) Now new applications and standards - and these are undeniably important - have helped to rejuvenate demand as companies have realised that RFID's value is in business process innovation, not the technology. as the mantra goes, RFID is the enabler, not the solution.
Asset management projects are key growth areas with companies struggling to manage their nonmaintained or disposable assets, while in-store inventory management, rather than supply chain management, is driving many noncompliance retail projects.
Gartner suggests that the RFID market is now in its exploration phase with businesses relying on RFID to increase their competitiveness. Globalisation too is a driver as businesses seek to accelerate time to market for new products, services and geographies.
One of the key issues Gartner has isolated is that the widespread adoption of RFID is being impacted by the fact that users cannot buy an end-to-end RFID solution from one provider, and the industry remains diverse and complex - lots of small startups, and a consequent lack maturity in product offerings. 2008 is likely to see continued merger and acquisition (M&A) activity as organisations try to give themselves the critical mass to be able to compete.
Exciting times then, it would seem, though not everyone is convinced. This blog I read suggests there is too much cheerleading, and reckons the supply chain future may actually be in voice automation.
That may or may not be the case. I believe we are moving ahead with RFID - a little bumpily but it is clear there is momentum. I hear the EPCglobal RFID Test Centre in Cheshire, which opened lat last year - has a number of visits lined up from companies keen to see how RFID can benefit them.
Going back to the EU privacy debate, I agree that solutions have to be baked in rather than bolted on. What we don't want is for the privacy safeguards to strangle innovation, so the policymakers have a difficult balancing act to pull off. Baked in, yes. Burnt to a crisp, no.
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