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RFID Reader Market Worth $1.18b in 2010

Venture Development Corporation yesterday released findings on last year's market for RFID readers, which the firm pegs at $320 million. Over the next five years, VDC expects the market to grow at a compound annual growth rate of almost 30%, reaching $1.18 billion in 2010.
Sep 08, 2006This article was originally published by RFID Update.

September 8, 2006—Venture Development Corporation of Natick, Massachusetts, yesterday released findings on last year's market for RFID readers, which the firm pegs at $320 million. Over the next five years, VDC expects the market to grow at a compound annual growth rate of almost 30%, reaching $1.18 billion in 2010.

In 2005, fixed-position readers accounted for the vast majority of the $320m, with 81.4% of the market. The rest of the market was split evenly between OEM modules (readers that are integrated into other hardware, like printers) and handhelds; the former accounted for 9.4% of the market, the latter 9.2%.

The gaping disparity between demand for fixed readers and handhelds will persist, according to VDC. As EPC RFID adoption widens in the supply chain and retail sectors, implementations will become more complex and require more read points in places like conveyors, fork lifts and other vehicles, and dock doors. Demand will also come from applications where read points are embedded in counters, tabletops, kiosks, and workstations. Essentially, the applications for fixed RFID readers are far more varied than for handheld readers, which are primarily used in the supply chain for exception handling and manual scanning. "The expansion of applications such as pallet tracking, item management, baggage handling, industrial automation, automatic payment, and contactless smartcard applications (i.e., payment, ticketing, and security/access control) that require fixed-position readers will continue to drive the imbalance between handheld and fixed-position readers in all regions," said Shan shan Chu, an analyst in VDC's RFID Practice.

That's not to say that the handheld market will stagnate. On the contrary, it will inch up to 13% of the total RFID reader market by 2010, predicts VDC, reaching a market valuation of $150 million. This growth will be due to the aforementioned EPC RFID adoption in the supply chain, where handhelds will be used in warehousing and inventorying applications.

VDC noted in its assessment of last year's RFID reader market that the "overwhelming majority" of readers were for low- and high-frequency applications. Glaringly absent is a mention of the ultrahigh frequency (UHF) readers used in the EPC market that the likes of Alien, Impinj, Intermec, Symbol, and ThingMagic serve. Indeed, sources tell RFID Update that a paltry 18,000 such readers were sold last year, and that almost half of them were purchased by just three end users: Wal-Mart, Target, and Tesco.

Read the release from Venture Development Corporation
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