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RFID Stakeholders Need to Prepare for the Internet of Things

The IoT will pose significant risks and opportunities for many in the RFID industry during the next 24 months.
By Scot Stelter

As it evolves, the IoT universe will envelop RFID, with the action developing along several themes:

• Explosive growth in IoT device volumes will drive down costs for hardware components, such as network radios, microcontrollers and sensors. The RFID portion of an IoT device's bill of materials will experience price pressure as its proportion of an IoT device's total cost increases.

• Lower hardware costs and open-source hardware platforms, like Arduino and Raspberry Pi, will encourage invention that will lead to an expansion of RFID reader form factors and embedded RFID solutions.

• Lightweight communications protocols, such as Message Queuing Telemetry Transport (MQTT), MQTT-S and Constrained Application Protocol (CoAP), will enable cheap, resource-constrained devices of all kinds, including sensors and short-range RFID readers with a long battery life.

• Software-as-a-service (SaaS) models for device management and data collection will crowd out traditional software licenses, eliminating many server installations not only on-premises, but also in commercial clouds like Amazon Web Services or Microsoft Azure. Combined with new financing models in which end users purchase not the reader infrastructure, but rather the data flowing from it, this will reduce startup costs, enabling a low investment, pay-as-you-go model for end users. This will drive RFID adoption, but will also change the economics for hardware resellers in unpredictable ways.

• A new RFID data economy will emerge as cloud services for simple data brokerage and device management add data analytics and other services.

These trends will create both risk and opportunity for many in the RFID industry throughout the next 24 months. The RFID world has focused for several years on getting radio frequency identification across the chasm and onto Main Street. With recent successes in retail and health care providing profitability, it's time to look up, see what's going on around us and prepare for what's to come.

Scot Stelter has worked in the RFID field for more than 10 years, serving in senior marketing positions at both Alien Technology and Impinj. His company, Stelter Product Strategy LLC, provides guidance to businesses contemplating product strategy decisions in RFID, the Internet of Things and machine-to-machine communications.

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