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9 Things RFID Will Be Remembered for in '08, Part 3

This article concludes a three-part series that recaps the top RFID developments from 2008. This final installment highlights prominent security-related activity, updates ongoing trends and shares thoughts on how the overall economy may impact the RFID industry. covered technology developments, and documented merger, acquisition, startup and investment activity.
Dec 17, 2008This article was originally published by RFID Update.

December 17, 2008—This article concludes a three-part series that recaps the top RFID developments from 2008. This final installment highlights prominent security-related activity, updates ongoing trends and shares thoughts on how the overall economy may impact the RFID industry. Part 1 covered technology developments in 2008, and Part 2 documented the year's merger, acquisition, startup and investment activity.

#3 -- Providers Proactive About Security

RFID security and privacy topics were often in the news during 2008, but -- perhaps for the first time -- the news was more about progress than problems. The RFID Security Alliance officially formed to provide market education and encourage collaboration on RFID security development, and had 11 members by year's end. Three of the founding members, NeoCatena Networks, Veratag and Verayo, are startups who also introduced new technology during the year to enhance RFID device and network security. A fourth founder, SecureRF recently earned a grant to develop tag authentication and encryption technology for the US Air Force.

Unfortunately, there remains a good market for products that improve security for RFID systems and public confidence in them. Researchers reported that the MIFARE Classic high frequency RFID chips that are used in billions of contactless fare cards could be hacked, putting numerous public transportation systems around the world at risk. There were also conflicting reports regarding the safety of using RFID systems around medical equipment. Industry association AIM Global is stepping in to conduct balanced research to resolve that issue.

Several US states, federal government agencies and the European Union continued their ongoing efforts to develop legislation to regulate RFID. There was also considerable activity in the US pharmaceutical industry regarding electronic pedigrees to improve supply chain security. However, California postponed its implementation requirements, making widespread pharmaceutical industry use of RFID-based security systems seem farther away than it did at the start of the year.

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#2 -- Trends on a Treadmill

The pharmaceutical industry false start is one of several instances where RFID activity made more news than progress. For example, two US congressmen introduced a bill calling for the development of pharmaceutical tracking systems, the FDA and European Commission separately took up similar efforts, all while previous pedigree- and RFID-related drug tracking initiatives were still active. There were comparatively few announcements of actual implementations.

Similar situations played out in other segments of the industry. Sam's Club announced new RFID requirements for suppliers that culminated in far-reaching item-level tagging requirements by 2010. Despite the attention this program expansion received, RFID vendors said it has not been a big catalyst for new or expanded implementations. Neither have the multiple RFID contracts that various US defense agencies issued throughout the year. There was an uptick in item-level tagging implementations by retailers, but momentum for this trend began building before 2008.

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#1 -- It's the economy...

The RFID industry does not operate in a vacuum, and is connected to overall business and economic trends. Yet while the overall economy was crashing in the fall of 2008, the RFID industry reported mostly good news. There have not been any high-profile RFID company failures attributed to the recent economic volatility, and through mid-December, nearly all the RFID market research reports had forecast growth for 2009. Several industry professionals explained how RFID use could grow in the slow business climate in a series RFID Update published in early November.

However, business conditions have deteriorated since then, and many RFID professionals are expressing worries in private conversations and preparing for a very challenging year in 2009. The current tone is uncertainty. Some clarity could emerge late next month, when public companies begin reporting their results for the October-December quarter and present their sales outlook.

Those who are optimistic that RFID can grow in a slow economy point to its ability to reduce labor needs, automate processes and help organizations improve asset utilization and reduce replacement costs. Somewhat surprisingly, two hard-hit industries, financial services and retail, are expected to be strong RFID adopters in 2009, for IT asset management and item-level merchandise tracking, respectively. Other industries and applications where RFID expected to do well next year, even if the economy does not rebound, include healthcare, closed-loop asset tracking (including RTLS systems) in industrial environments, vehicle tracking and airline baggage handling.

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What do you think were the most important developments and stories of 2008? Please email your thoughts to editor@rfidupdate.com. The input will be used to guide future coverage and selected comments may be published in RFID Update.
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