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IDTechEx Identifies "Booming" Areas for RFID

Research firm IDTechEx has published an article in which it identifies four sectors of the RFID market it characterizes as booming: public transportation, label converters, retail, and active RFID.
Jan 18, 2007This article was originally published by RFID Update.

January 18, 2007—Research firm IDTechEx has published an article in which it identifies four sectors of the RFID market it characterizes as booming:
  1. Public transportation. Contactless transport cards are becoming the norm around the world, driving demand for the RFID inlays and readers that enable the contactless interaction. IDTechEx cites Australia's ERG, which has already done $100 million in sales of contactless card systems. The company recently landed an additional $40 million in business, spread across two projects (one in Manila, the other unannounced). IDTechEx also points out that the currency on contactless public transportation cards is increasingly being accepted as a cash alternative, allowing users to buy standard retail goods with them. This trend is expected to foster further adoption of RFID-enabled contactless technology.
  2. Label converters. Label converters are the firms that buy reams of delicate RFID inlays and embed them in sheathing, ribbon, plastic, cards, or other media that constitutes the final tag product. Until recently, they have typically shied away from RFID. The equipment necessary to offer label converting services is highly specialized and expensive, so for the most part only the big and/or intrepid label converters have demonstrated a willingness to get into the RFID business. That is changing, however. According to IDTechEx, smaller label converters are identifying niche areas that are too small to interest the big label converters, who often cater to huge consumer packaged goods manufacturers.
  3. Retail. While many consider the retail sector's adoption of RFID disappointing, IDTechEx asserts that in fact it is advancing apace. The expansion of item-level tagging by British retailer Marks & Spencer is evidence. By spring of this year, the company hopes to have tripled its item-level infrastructure from 42 to 120 stores, with a planned 350 million objects tagged annually by next year. (For more on this initiative, see Marks & Spencer to Expand RFID Item Tagging.)
  4. Active RFID. According to IDTechEx's own projections, the active RFID market can look forward to a decade of strong growth, going from $550 million last year to $6.78 billion in 2016. Anyone following the industry will have noticed that indeed active RFID and RTLS has been a hot area, driven by an increase in asset tracking. In fact, RFID Update designated asset tracking -- and by extension the adoption of active RFID and RTLS -- as a key trend in 2006 (see Top 10 RFID Trends of 2006, Part 1). IDTechEx chairman Dr. Peter Harrop said, "Active RFID use in military, healthcare and other sectors is moving ahead extremely strongly with individual orders of $30 million and more being recently reported."
In a separate article, IDTechEx identifies the airline industry as, potentially, "the next boom sector". Notably, the opportunities are not only in baggage tagging, which, while a compelling application on its face, has yet to gain much traction. ABI Research recently published rather conservative estimates of the opportunity in baggage tracking, predicting a market value of only $27.5 million by 2011 (see Years Before RFID Baggage Tracking Takes Off).
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