|Home||Internet of Things||Aerospace||Apparel||Energy||Defense||Health Care||Logistics||Manufacturing||Retail|
Outlook Strong for RFID Printers, Bucking Doubts
Market research and analysts recently affirmed strong growth prospects for RFID smart label printer/encoders, which were called into question in light of tepid supply chain adoption and strategic moves by two leading product manufacturers.
Oct 26, 2007—This article was originally published by RFID Update.
October 26, 2007—Adoption of RFID printer/encoders is poised for strong growth, and the products will remain the leading method for users to create and encode their own RFID tags for the foreseeable future, according to industry analysts and recent research.
The long-term viability of the printer/encoder market was called into question following slower-than-expected supply chain adoption, the emergence of smart packaging solutions (in which RFID is embedded in the packaging itself), and recent strategic moves by leading printer/encoder manufacturers Printronix and Zebra Technologies. However, questions about the market strength and growth prospects should be put to rest, Andrew Nathanson, director of Venture Development Corporation's (VDC) automatic identification and data collection research practice, told RFID Update.
"The smart label [that is, RFID] printer/encoder market was about $11 million last year, will be about $18 million this year, and we're projecting it to grow to $189.6 million by 2011," said Nathanson. "Overall, growth from last year to this year was a little slower than expected, particularly because the supply chain market was flat."
Printronix CFO George Harwood recently said the company's RFID printer/encoder revenues had "plateaued", and company CEO Robert Kleist said "RFID in the supply chain has not met the industry's expectations for growth." The comments were made during a conference call with analysts to discuss a buyout that is taking the public company private (see RFID Printer/Encoder Maker Printronix Acquired for $108M).
Printronix's comments were soon followed by an announcement from Zebra, the leading bar code and RFID smart label printer/encoder manufacturer, that it spent $161.3 million to buy an active RFID manufacturer and a logistics software provider. The acquisitions diversified the company from its core printer technology business (see RFID Printer Maker Zebra Makes Two Acquisitions). One leading printer/encoder maker restructuring the company and another making acquisitions outside the industry to fuel growth raised some eyebrows.
"There is a sea change in the market," industry analyst Chris Quilty of investment firm Raymond James told RFID Update. "It is an indication of smaller RFID market growth opportunities."
Nathanson noted that stagnant supply chain RFID adoption is limiting the growth prospects for companies such as Printronix that are focused heavily on that segment. But he emphasized there are many use cases for RFID smart label printer/encoders outside the supply chain, and VDC predicts 60 percent compound annual growth for the product category through 2011.
"We're seeing a lot of activity on both sides of the smart labeling market -- for Gen2 (UHF) technology and for 13.56 MHz (HF) technology."
VDC expects especially high RFID adoption growth in the healthcare and airline markets. The International Air Transport Association (IATA) is promoting RFID baggage tagging and developed a transition plan earlier this year that it hopes will spur RFID adoption at 80 leading airports within six years. Nathanson said VDC does not expect the IATA to meet that goal but projects more than 30 airports will implement RFID baggage tracking systems. Each airport would install an average of 200 printer/encoders and produce between 8 and 15 million smart labels per year, according to Nathanson. Those are significant volumes.
Motorola, which makes RFID readers and tags, also recently affirmed the strength of the airline market (see Motorola on Aviation Adoption of RFID).
Earlier this week RFID Update published a two-part series that examined smart packaging technologies and whether their adoption will cut into the smart labeling market (see Getting a Read on RFID Smart Packaging and When Will RFID Packaging Get Smart?). The consensus is that smart packaging is not sufficiently developed to threaten smart labeling now, but could become a viable alternative over the long term. VDC shares this view and doesn't think smart packaging adoption will undermine strong smart label printer/encoder growth in the next five years.
Login and post your comment!
Not a member?
Signup for an account now to access all of the features of RFIDJournal.com!
SEND IT YOUR WAY
RFID JOURNAL EVENTS
ASK THE EXPERTS
Simply enter a question for our experts.
|RFID Journal LIVE!||RFID in Health Care||LIVE! LatAm||LIVE! Brasil||LIVE! Europe||RFID Connect||Virtual Events||RFID Journal Awards||Webinars||Presentations|