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Middle East RFID Market Heats Up
While still small compared with other parts of the world, the region's RFID market is expected to grow to $69 million in 2012—nearly quadruple what it was in 2007.
By Beth Bacheldor
Feb. 12, 2009—Organizations across North America, Europe and Asia have been investing in radio frequency identification for several years to help improve operations, cut costs and boost revenues. Now, the technology is gaining traction in a new corner of the world: the Middle East.
In 2007, the market for RFID hardware, software and services in the Middle East region was valued at approximately $18.1 million, and last year it was estimated to be worth about $22.9 million, according to VDC Research, a technology market research and strategy firm located in Natick, Mass. This year, VDC estimates the market will reach $29.4 million (the firm notes that 2008 figures are estimates subject to change in light of current unstable economic conditions worldwide). By 2012, the market in the Middle East is expected to be $69.1 million, VDC reports, with the overall RFID market in the Middle East expected to grow an average 24.7 percent year-over-year between 2007 and 2012. The countries included in VDC's Middle East forecast are Turkey, Iran, Iraq, Saudi Arabia, Yemen, Syria, Israel, Jordan, United Arab Emirates (UAE), Lebanon, Palestine, Kuwait, Oman, Qatar and Bahrain.
The RFID market size in the Middle East may be small compared with the rest of the world, but its growth is stronger than certain other regions, especially for certain applications. In the Middle East, the focus is on employing RFID as a tool to help track assets and individuals, particularly in the construction and oil and gas industries—two of the region's top industries. RFID is also making headway in other sectors, including the auto industry, retail, health care, and some of the region's governments, which have RFID-enabled identification card and passport initiatives.
"The Middle East, in a positive sense, is the perfect storm for RFID," says Mike Meranda, CEO of TagStone, a relatively new RFID consultancy based in Dubai, United Arab Emirates. Founded in 2005 (see TagStone Launches, Announces Partnerships), the company operates an RFID testing and demonstration facility in Dubai, and offers business assessment, process and technology blending, solution architecture, technology selection, and solution integration and support in that area of the world.
In contrast, VDC notes, the RFID market for North and South America in 2007 was $415 million, and is expected to expand to $1.28 billion by 2012. In the combined Europe, Middle East and Africa (EMEA) region (of which Europe counts for the majority of revenue), the RFID market was valued at $428 million, and expected to rise to $960 million by 2012. And in the Asia-Pacific region, VDC reports, the RFID market in 2007 was $379 million and will reach $1.6 billion by 2012.
In Europe and North America particularly, RFID has received a great deal of attention as a technology tool to help retailers and others track cases and pallets of goods as they traverse supply chains, from the moment they leave suppliers' sites until they move through distribution channels and arrive at the retail stores (a movement spurred by retail giants Wal-Mart Stores and Metro Group). In Asia Pacific, much of RFID's growth has been fostered by that region's national governments, which have been active in RFID technology pilots and the development of international RFID standards. Additionally, Asia Pacific's continued growth as a manufacturing hub has spurred the technology's use in factories and warehouses.
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Feb. 12, 2009—Organizations across North America, Europe and Asia have been investing in radio frequency identification for several years to help improve operations, cut costs and boost revenues. Now, the technology is gaining traction in a new corner of the world: the Middle East.
In 2007, the market for RFID hardware, software and services in the Middle East region was valued at approximately $18.1 million, and last year it was estimated to be worth about $22.9 million, according to VDC Research, a technology market research and strategy firm located in Natick, Mass. This year, VDC estimates the market will reach $29.4 million (the firm notes that 2008 figures are estimates subject to change in light of current unstable economic conditions worldwide). By 2012, the market in the Middle East is expected to be $69.1 million, VDC reports, with the overall RFID market in the Middle East expected to grow an average 24.7 percent year-over-year between 2007 and 2012. The countries included in VDC's Middle East forecast are Turkey, Iran, Iraq, Saudi Arabia, Yemen, Syria, Israel, Jordan, United Arab Emirates (UAE), Lebanon, Palestine, Kuwait, Oman, Qatar and Bahrain.
The RFID market size in the Middle East may be small compared with the rest of the world, but its growth is stronger than certain other regions, especially for certain applications. In the Middle East, the focus is on employing RFID as a tool to help track assets and individuals, particularly in the construction and oil and gas industries—two of the region's top industries. RFID is also making headway in other sectors, including the auto industry, retail, health care, and some of the region's governments, which have RFID-enabled identification card and passport initiatives.
"The Middle East, in a positive sense, is the perfect storm for RFID," says Mike Meranda, CEO of TagStone, a relatively new RFID consultancy based in Dubai, United Arab Emirates. Founded in 2005 (see TagStone Launches, Announces Partnerships), the company operates an RFID testing and demonstration facility in Dubai, and offers business assessment, process and technology blending, solution architecture, technology selection, and solution integration and support in that area of the world.
In contrast, VDC notes, the RFID market for North and South America in 2007 was $415 million, and is expected to expand to $1.28 billion by 2012. In the combined Europe, Middle East and Africa (EMEA) region (of which Europe counts for the majority of revenue), the RFID market was valued at $428 million, and expected to rise to $960 million by 2012. And in the Asia-Pacific region, VDC reports, the RFID market in 2007 was $379 million and will reach $1.6 billion by 2012.
In Europe and North America particularly, RFID has received a great deal of attention as a technology tool to help retailers and others track cases and pallets of goods as they traverse supply chains, from the moment they leave suppliers' sites until they move through distribution channels and arrive at the retail stores (a movement spurred by retail giants Wal-Mart Stores and Metro Group). In Asia Pacific, much of RFID's growth has been fostered by that region's national governments, which have been active in RFID technology pilots and the development of international RFID standards. Additionally, Asia Pacific's continued growth as a manufacturing hub has spurred the technology's use in factories and warehouses.
READERS' COMMENTS
RFID Market Estimates by VDC in Error?
According to reporting on the VDC Research Group website, the U S. RFID market was $2,972.5M in 2007. How can this be reconciled with the following statement from the above article? "In contrast, VDC notes, the RFID market for North and South America in 2007 was $415 million, and is expected to expand to $1.28 billion by 2012. " Any insights would be appreciated.
Posted By: M. Cosby 3/02/2009 at 4:10:55 PM
Correction to Comment
My previous comment was incorrect. VDC Research Group website reports that the Global RFID Market was $2.9725B in 2007, not the U.S. market I stated earlier. I would still like to understand if this is accurate, based on the fact that the $415M reported for North/South America in this article is only 14% of global market. thank you-
Posted By: M. Cosby 3/02/2009 at 4:31:29 PM