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Frost's Findings on the North American RFID Market

Frost & Sullivan last week released new research on the North American RFID market as part of its Automatic Identification & Security Growth Partnership Service. This article highlights a few of the key findings.
May 14, 2007This article was originally published by RFID Update.

May 14, 2007—Frost & Sullivan last week released new research on the North American RFID market as part of its Automatic Identification & Security Growth Partnership Service. Highlighted below are a few of the key findings:
  • The passive RFID tag market in North America generated revenues of 124.6 million last year. Frost predicts that the market will grow to $486.6 million in 2013, representing a compounded annual growth rate (CAGR) of about 21.5%.
     
  • The introduction of the Gen2 standard has been the leading catalyst for the passive tag market in North America.
     
  • Tag vendors are still challenged by the fact that they invested heavily in production capacity, anticipating faster growth in demand than has actually materialized.
     
  • The North American RFID reader market generated revenues of $23.1 million last year. That market will grow to $241.6 million in 2013, predicts Frost, representing a compounded annual growth rate (CAGR) of almost 40%.
     
  • The reader market is still primarily driven by Wal-Mart and US Department of Defense compliance, indicates Frost. "The continuing mandates from Wal-Mart and other retail stores as well as the U.S Department of Defense to all their suppliers to tag their items is a major driver for the U.S. RFID readers market and the RFID industry in general," said Frost & Sullivan analyst Priyanka Gouthaman.
     
  • As in the passive tag market, the Gen2 standard has had a major, positive impact on demand for readers.
     
  • Frost cautions that read accuracy is still imperfect and represents a hurdle to wider adoption.
     
  • Another hurdle is the amount of data generated by RFID reads, which could slow and or even overwhelm existing infrastructure. This eventuality can be avoided if readers selectively process data, opting only for exceptions and ignoring data that represents smoothly functioning business operations.
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