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The Next Challenge for the RFID Industry: Rapid Growth

The technology adoption life cycle isn't a smooth upward curve, and that will present problems for users and providers of RFID technologies.
By Mark Roberti
Dec 08, 2014

The radio frequency identification industry is on the cusp of rapid growth. When precisely we will reach the tipping point, I can't say (though I will provide some insights in the next issue of our digital magazine). But I can say that both potential users and providers of RFID technologies will be caught unprepared for the rapid acceleration in adoption.

As a journalist, I've seen it happen before. In the late 1990s, I was an editor at Information Week, a leading IT trade publication in the United States. As late as 1999, CEOs of major corporations were dismissing the Internet as something meaningful for business. Some said they couldn't trust their supply chain to a public network that could go down at any time. Others said no one would come home from working on a computer all day and then shop online.

Things changed quickly—and dramatically. By 2000, General Electric and other companies were trumpeting their use of the Internet. Analysts began to ask CEOs about their Internet strategy on quarterly calls with investors. Suddenly, millions of dollars were being poured into websites. In many cases, the sites were poorly built because the most experienced and sophisticated developers had already been hired. Millions of dollars were wasted.

The same thing will happen with RFID. CEOs who are now dismissing RFID as useless—amazingly, many still do—will be taken by surprise when the technology takes off, and will have to scramble to catch up. They will wind up hiring second- or third-rate systems integrators who have also jumped into the game late and know little about RFID. Projects will be bungled, and will require cost additional dollars to fix.

RFID vendors will also be caught by surprise. Many companies have been burned by investing too much too early in anticipation of growth that never occurred. Now, many are holding back on investing in capacity, because they are concerned that the growth won't materialize. When it does come, there will be a scramble to try to meet demand. Some companies will be outflanked by more nimble competitors and lose market.

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