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Report: RFID Tag Market to Explode

A bullish forecast for the RFID market from market research firm In-Stat predicted it increasing from $300 million in 2004 to almost $3 billion in 2009.
Jan 12, 2005This article was originally published by RFID Update.

January 12, 2005—A bullish forecast for the RFID market was released yesterday in a report from market research firm In-Stat of Scottsdale, Arizona. RFID tag consumption is predicted to explode from 2004's level of $300 million to almost $3 billion in 2009, vaulting RFID to second place (behind cell phones) on the list of the world's most pervasive wireless technologies. Supply chain applications will, of course, drive demand in the early stages. While the report notes that consumer goods tagging could substantially contribute to demand at some point, tag cost must decrease before becoming economically justifiable. Additionally, persistent privacy concerns must be laid to rest if the public is to accept RFID tags embedded within purchased goods.

While In-Stat's prediction is promising indeed, it comes at an odd time; RFID tag demand seems as unpredictable as ever. In late 2004, there was a widely reported tag shortage, as tag manufacturers stopped producing Class 1 tags that were to become obsolete with the ratification of the GEN 2 standard. Now that GEN 2 has been ratified, aggressive tag production is expected to begin in earnest, but there remain outstanding intellectual property questions: despite GEN 2's official "royalty free" status, many are unsure if they'll have to pay Intermec (and possibly others) for the use of certain RFID technologies anyway.

Later this year, tag demand will become much easier to predict. By that time, the all-important intellectual property issues will be widely understood and accounted for, the Wal-Mart initiative will have overcome existing hiccups, and long-anticipated entrants like Texas Instruments and Philips will have started to have their effect on supply and price. But before all that happens, exact tag demand predictions appear premature.

Check out the In-Stat press release
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