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More Than Half of RFID Users Expect ROI Within 18 Months

The expected return-on-investment period for RFID deployments is shrinking, according to an annual survey of end users conducted by ABI Research. ABI found that 36.7 percent of end users think RFID will provide ROI within 12 months, 51.7 percent expect it within 18 months, and 65 percent expect it within two years.
Feb 10, 2009This article was originally published by RFID Update.

February 10, 2009—Prices for RFID equipment and supplies are falling, and so is the time end users expect to achieve full return on investment (ROI) from their RFID systems, according to recently released information from ABI Research. More than half (51.7 percent) of RFID users and prospects that ABI surveyed expect ROI within 18 months, including 36.7 percent who expect it within 12 months. See the table below for complete results.

Less than 12 months 12-18 months 18-24 months More than 24 months Do not know
36.7% 25.0% 13.3% 6.7% 18.3%

"One of the trends I noticed is the ROI timeframes and expectations have shortened compared to previous surveys," ABI Research practice director Mike Liard told RFID Update. "The expectations are definitely a signal of improved RFID price points."

Liard also credits industry education and communication efforts for changing expectations. "While they may not be specific about ROI numbers, users are talking about their general timeframes. More companies are disseminating information about ROI, and more prospects are listening."

Respondents with RFID systems in place expect new deployments to provide ROI much faster than those who have not yet implemented RFID. A full 73.7 percent of current users expect new systems to pay for themselves in less than 18 months, compared to 43.5 percent of non-users; 42.1 percent of current users expect ROI within 12 months, compared to 26.1 percent of non-users.

The numbers are based on data collected last September as part of ABI's annual survey of RFID users and was recently released as part of the firm's ongoing research service. The survey included end users who have RFID systems running and are piloting additional applications, and prospective users who are currently evaluating or piloting the technology. ABI only announced aggregate data and did not provide ROI expectations for specific applications, technologies, or industries.

There is a correlation between equipment prices and ROI expectations, according to Liard, especially for organizations that are considering going beyond pilot projects. RFID tag and reader costs are widely acknowledged to be falling, especially for passive UHF products. Even since ABI collected the survey data last fall, new, low-priced products have been announced (see Invengo Drops Gen2 Inlay Price to 5.8 cents, New RFID Handheld Provides Range, Price Breakthroughs and Kovio Set to Commercialize Printed RFID Tags), which could send ROI expectations even higher.
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