IDTechEx Reviews RFID Progress in 2007
Headquartered in Cambridge, Mass., IDTechEx specializes in printed electronics, RFID and smart packaging, providing strictly independent marketing, technical and business advice and services on these subjects. Raghu Das, CEO/MD of IDTechEx, has been closely involved with the development of RFID and printed electronics for more than six years. Following are highlights from his report on how RFID use grew in the marketplace during 2007.
In round figures, the value of the RFID market grew strongly to $5 billion in 2007, mainly powered by a peak in deliveries of the Chinese national ID card, with about $2 billion of cards and infrastructure being delivered by Chinese suppliers. Globally, the RFID business remained government driven with the healthcare sector showing particularly strong growth in projects, and the financial, security and safety sector dwarfing all others in both expenditure and number of projects. Healthcare accounted for a massive 48 percent of market value with passenger transport and automotive coming second with 19 percent value share. (We refer to the value of tags, systems and support combined.)
Through 2007, the United States retained its lead in number of RFID projects, but China leapt from number five to number three, overtaking Japan and Germany. This tells us that there are a vast number of new RFID projects in China that will take up the slack now that the glory days of the national ID card are over. They are hugely varied—from people and construction materials to mail bags—and the prospect of having to tag 150 million pet dogs and 2.4 billion pigs yearly by law.
In number of projects, the financial,security and safety sector was the largest, at about 19 percent of the cumulative projects in 2007, in line with our identification of it as the leader in money spent. After that came the passenger transport, automotive sector, with 13 percent of all projects cumulatively. Those percentages were the same as in 2006. Just one applicational sector took significantly more of the pie by the end of 2007—healthcare. This was predicted in 2006, but it did not happen for the reason given—widespread tagging of drugs for anti-counterfeiting purposes. Many were in favour of the half measure of 2D barcodes for singulation. As a result, frequent automated checking for counterfeits, regardless of misorientation and obscuration, and with high integrity, will be a matter for interminable RFID trials and little more. Even the frequency remains undecided. The vibrant growth of RFID in the healthcare sector was mainly due to Real Time Location Systems (RTLS) on staff and assets, particularly those using existing WiFi systems in hospitals. There were also many other RFID technologies applied to healthcare, and they provided excellent paybacks and improvements to safety and security.
By the end of 2007, the RFID tagging of people had jumped from 8 percent to 11 percent of all projects cumulatively. It may not please the privacy advocates, but, among the benefits, the technology reduced mother-baby mismatches and baby theft in hospitals, prevented prisoner escapes and enabled severe diabetics to get correct treatment before they died in the street.
Active RFID accounted for about 13 percent of all RFID expenditure in 2007, but this figure was depressed by the huge Chinese national ID card scheme, which involves passive RFID.
Those seeking to prosper in RFID should follow the applications where governments either make it a legal requirement as with some national ID cards and livestock initiatives, or where government foots the bill. For example, military and much healthcare expenditure on RFID is really government money and even the strongly progressing tagging of air baggage is usually backed by huge government grants to airports and airlines—the airports in North America and East Asia being frequently owned by government anyway.
Labels are the preferred RFID format in numbers sold—and that by a big margin. However, that increase in market share by active RFID and the increased use of ruggedised passive RFID and passive RFID in the form of wristbands and casino chips has meant that the old plastic moulding format is back with a vengeance. In the case of active RFID, that almost invariably means having a lithium button battery inside. The penetration of the new laminar batteries was negligible in 2007. Plastic mouldings and wristbands leapt from 4.9 percent to 10.4 percent of all recorded RFID projects by year end.
By the end of 2007, most RFID projects were still full rollouts, showing that the industry is more mature than it is often portrayed. Despite the dream of Massachusetts Institute of Technology in 1999 that most RFID tags could contain nothing more than simple read-only numbers, the computer system coping with the rest, this cost-effective approach remains impracticable for most applications. At the start of 2007, 27 percent of projects involved read-only tags and at the end of the year, the figure was 26 percent.
From air baggage tags to tagging items of consumer goods, it seems that the clunky approach of writing to the tag at various times during its life had to be retained by most. That means inherent lack of data synchronisation and inherently expensive tags and readers, with read/write, password-protected chips and so on. Even in large closed systems, this is at best questionable, given that read-only tags perform well at world leader Marks & Spencer in the UK with what will soon be 350 million tags yearly on apparel. Read-only tags also perform well in road tolling and many other applications.
The RFID industry remains far more fragmented than customers and prospective customers would wish. The number of new players greatly exceeds the number being mopped up by Assa Abloy and - newly active in 2007 - Zebra Technologies and a few other acquirors. Curiously, most of the players continue to make little attempt to become famous and many hide what successes they have. By contrast, we continued to see those promoting UHF passive tag systems, shouting even their smallest successes from the rooftops and, in 2007 we could newly add those promoting WiFi RTLS. In general, this is to be commended and those promoting products at HF and other frequencies could learn from this.
For more information, visit www.IDTechEx.com.
