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Research: Euro RFID Market to Hit EUR5 Billion in 2007

According to a press release from research firm Frost & Sullivan, the European market for RFID hardware, software, and services will exceed EUR5 billion in 2007.
May 17, 2005This article was originally published by RFID Update.

May 17, 2005—According to a press release from research firm Frost & Sullivan, the market for RFID hardware, software, and services will exceed EUR5 billion in 2007. The growth will result from the decreasing cost of RFID technology, specifically that of tags. "Further price decreases are likely to positively impact manufacturers' unit shipments and encourage them to attempt more large-scale projects," the report notes.

The research also focuses on the significant new opportunities RFID will introduce for mobile operators. Given the widespread transitioning from fixed to mobile data transportation, Frost & Sullivan sees RFID technology as an effective wireless means of moving an enterprise's field data to its central processing servers. Consultant Andrew Tanner-Smith is quoted as saying that RFID "is the best technology to allow remote access on a large scale, and ... through the process of fixed-mobile substitution, it replaces fixed telecommunications lines where these have been the preferred data transport method in the past." While Frost & Sullivan does not expect this to happen until 2007, it asserts that the potential is promising enough to justify planning and putting infrastructure in place now. "Frost & Sullivan further believes that there is a huge base of potential end users seeking the most economical way of transporting data from the field to the back office," it goes on. "Mobile operators can successfully convert these end users into RFID clients by offering attractive pricing structures and bundling voice and data services into one cost-effective option."

The research indicates that the value of data generated by such use of RFID could reach the terabyte range. Given the enormity of this quantity of data, mobile operators need to be selective about which players in the RFID industry they choose to partner with. Furthermore, they are advised to be "realistic" about the responsibility of carrying this data by adequately accounting for it in new pricing structures.

Frost & Sullivan's EUR5 billion prediction contrasts sharply with that of Juniper Research made earlier this year. Juniper predicted an RFID market of $1.1 billion in 2007, the equivalent of only about 870 million euros. (Granted, Juniper's report only refers to the market in Western Europe, but it is safe to assume that RFID activity in non-Western Europe would only negligibly affect the overall sum.) Thus, it seems that between two research companies there is a disagreement by a factor of roughly six with respect to Europe's RFID market in 2007, just two years away. The only conclusion it seems safe to draw is that the near-term RFID growth rate remains anybody's guess.

Read the Frost & Sullivan press release here
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