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Top 10 RFID Trends of 2006, Part 1

This article is the first of a three-part series looking at the top ten trends in RFID over the past year. Today's article looks at trends 10 through 7.
Dec 18, 2006This article was originally published by RFID Update.

December 18, 2006—#10 - RFID and the Citizen: Passports, Privacy, and Politics
There were a number of developments in 2006 that related to the coexistence of RFID and the public. E-passports, which offer contactless reading and enhanced anti-counterfeiting, became a reality. Dozens of countries around the world began issuing them, heralding a switch from paper-only passports to ones that rely on RFID. Lawmakers took an increased interest in the technology, the most notable examples being the European Commission's initiative to develop RFID public policy and the (ultimately vetoed) bill in California that sought to restrict RFID use in government-issued identification documents. Finally, privacy continued to be an issue this year, though seemingly less so than in 2005 when Katherine Albrecht released her anti-RFID book Spychips. Perhaps the decreased controversy was also due to the industry's more proactive engagement of the issue, as companies like IBM, RFIDsec, and SmartCode released tag products designed specially to protect consumer privacy. Here's hoping that trend continues in 2007 and beyond.

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#9 - RFID Pseudo-Scares
RFID became the favorite target of computer security academics, professionals, and hackers alike, as they very publicly asserted grave security vulnerabilities in the technology. First, there was the study by researchers at Vrije Universiteit in Amsterdam that concluded ubiquitous RFID might facilitate the spread of malicious viruses and worms. After lots of spilled ink and hand-wringing, this threat was found to be wildly exaggerated, relying as it did on systems implementers to neglect the most basic security precautions that have been in practice for years. Then there was the e-passport cloning hubbub, which turned out to be just that. The author of the "hack" hyped the ability to copy the data of an e-passport RFID chip onto a second, separate RFID chip, and the mainstream technology press fell for it. For a variety of reasons, the fact that an e-passport chip can be copied does not mean a hacker can trivially integrate the duplicated information into a phony passport and use it as his own.

The unfortunate outcome of both these events was that RFID's reputation as a secure technology was sullied. The silver lining was that the industry had to take a hard look at its technology to verify that in fact it was secure. Going forward, the industry's focus on security will be heightened, and that's a good thing for everyone.

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#8 - Cover Your Assets
As return-on-investment stubbornly eluded end users under customer mandate, many got creative with RFID by seeking ROI from non-compliance applications. The most common was closed-loop asset tracking, in which RFID is used to better track, manage, and utilize assets within a company's own four walls. Asset tracking provided a much-needed revenue stream for some passive RFID vendors, however it will likely only be a stopgap niche; these vendors still require the widespread adoption of supply chain RFID to survive and thrive in the long term. Furthermore, it has proven difficult to quantify just how large (or small) the asset-tracking opportunity is, since the applications are so diverse and particular to individual end users' processes.

The focus on asset tracking also opened end users' eyes to the full gamut of available technologies, beyond just the passive RFID required by mandates. Vendors of active RFID and real-time locating systems (RTLS) benefited as they landed business in the healthcare, logistics, and manufacturing industries. RTLS saw a further boost as G2 Microsystems introduced a new chip that brought down the price, energy consumption, and form factor of tags. These positive developments did not go unnoticed by investors, who bought equity in firms like RF Code, Ekahau, and Ubisense. Also, by far the biggest deal of the year was juggernaut defense contractor Lockheed Martin's acquisition of active RFID leader Savi Technology for a cool $425 million.

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#7 - Perennial Favorites: Wal-Mart and the DoD
It was the mandates by Wal-Mart and the US Department of Defense that in 2003 veritably birthed the RFID industry as it exists today. However, neither created the expected market boom. Wal-Mart suppliers purchased the bare minimum amount of RFID products and services to comply, while the DoD mandate got off to a slow start.

Despite the disappointment, both mandates continued in 2007 to be two important -- arguably the most important -- drivers of the industry. Wal-Mart reiterated its commitment to the technology even as Rollin Ford replaced RFID visionary Linda Dillman as CIO. The company reinforced words with action in September when it announced plans to expand the RFID footprint to an additional 500 locations before the end of next month. And in recent weeks, there have been rumblings that the company may widen its mandate to include even more suppliers for 2008.

For its part, the DoD mandate took a major step forward as ODIN technologies equipped 69 facilities in the continental US with RFID. With an infrastructure now in place, RFID tagging by suppliers is expected to accelerate.

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