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AMR Research: RFID Adoption "Stuck In Neutral"

Based on observations of last week's big industry show RFID Journal Live!, AMR Research's Dennis Gaughan concludes that RFID adoption is "stuck in neutral."
Apr 20, 2005This article was originally published by RFID Update.

April 20, 2005—Based on observations of last week's big industry show RFID Journal Live!, AMR Research's Dennis Gaughan concludes that RFID adoption is "stuck in neutral." The industry is plagued by the contradiction that while RFID first movers are repetitively insisting that others join them in deploying RFID, they remain unwilling to substantively share their findings on RFID's benefits. Thus the wave of would-be fast followers remains hesitant, still unsure of a path to ROI and increasingly hardened to the "Get Started Now" mantra coming from the chorus of first movers.

This dilemma is not new. The complaint that RFID first movers are remaining tight-lipped about their new insights has been made widely over the last twelve months. What is worrisome is Gaughan's conclusion that the pace of adoption is not quickening as most had hoped. In 2004, the tight-lipped attitude was accepted. After all, most respected the first movers' interest in protecting the competitive advantage they had gained through costly and laborious RFID implementations. But at some point, without empirical evidence, the idea that RFID will transform the supply chain and ultimately pay for itself could start coming off as abstract, stale, and unrealistic. Prospective end users will become disenchanted and even less willing to invest in the technology, exacerbating the problem even further.

How likely is this outcome? Not very. The mandates will remain, meaning end users will be forced to deploy RFID in spite of themselves. Furthermore, the wave of GEN 2 product releases expected later this year will spur purchases from those end users that already want the technology but have been waiting for the new standard.

Nonetheless, Gaughan's observation is an important one. The first movers preach a long-term approach to RFID. They recommend getting started with the technology as soon as possible, saying the question about RFID adoption is "when, not if." But wouldn't a similarly long-term approach on their part be wise? That is, wouldn't sharing their learnings with an end user community clamoring for quantitative evidence of RFID's benefits help drive adoption? Sure first movers might lose some competitively advantageous insights in the near term, but it would result in wider adoption of RFID over the long term. Thoughts? Send them here.

The report from AMR Research (registration required)
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