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Revenues in RFID market set to fall 15%, says analyst

Tash Shifrin

Analyst ABI Research has slashed its 2007 forecast for revenues in the radio frequency identification (RFID) software and services market to $3.1bn (£1.64bn), in a downward adjustment of 15%.

The analyst firm said its sharply lowered revenue estimates were based on increasing consolidation in the RFID market rather than any decline in the industry.

ABI’s RFID practice director, Michael Liard, said four interrelated factors, particularly in the asset management and supply chain management RFID market segments had led to the revised forecasts.

"They are market consolidation, collaborative solutions, the growing availability of off-the-shelf commercial RFID software packages and the improving level of skills in RFID project planning.”

The analyst firm expects further consolidation across and within companies as RFID products and services evolve, while collaboration is set to grow as RFID technology becomes increasingly standardised, with "ecosystems of partners" contributing to shared solutions and bringing costs down.

The analyst firm also predicts and increase in cheaper off-the-shelf packages to fit lower RFID integration budgets.

The revised ABI market forecast follows predictions in March by the Economist Intelligence Unit that RFID will extend its impact into a wide range of industries beyond its obvious home in the supply chain.

The EIU said RFID technology would in the long term be integrated into enterprise resource planning and other management tools.

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