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End Users Want an iPod

Could an RFID company build a solution that is easy to deploy, works well and doesn't involve a lot of hassle? If so, it could dramatically boost the technology's adoption.
By Mark Roberti
Dec 12, 2011I wrote last week about large technology companies not investing in radio frequency identification, and missing out on the opportunity to be the "gorilla" in the market (see Who Lost the RFID Industry?). One reader posted a follow-up comment saying that owning the market is an unrealistic "obsession," adding that the RFID industry "will develop step-by-step," and that I "cannot talk it to greatness."

The truth is, RFID companies used to be obsessed with owning the market. In the past, many wanted to sell proprietary systems in the hope of becoming the Microsoft of RFID (which was never going to happen). But no one thinks that way now. In fact, very few firms are focused on becoming the gorilla. And even those that say they have read and embrace the writings of Geoffrey Moore often fail to adopt strategies likely to lead to market dominance.

But this column's focus is really on the second point—that RFID will develop step-by-step. That was my view before I read Crossing the Chasm and Inside the Tornado, Moore's seminal works on technology adoption. But since reading those books, I have come to believe that RFID companies can either slow or speed up adoption, depending on their strategies.

According to Moore, before a new technology, such as RFID, can go mainstream, there must be a problem that no other technology can solve, as well as a global standard, a whole product, a critical mass of users and a gorilla that the rest of the market feels safe to embrace.

The problem is that there is no whole RFID product. End users can buy tags, readers and software, and then hire someone to integrate them, but that involves investing time and money—and, perhaps more important, taking a significant risk. The project might fail, and all of that time and money would be wasted. That is probably the biggest drag on the market today.

A similar state of affairs existed before Apple introduced the iPod. There were hardware and software for downloading songs off of CDs. There were MP3 players for playing those tunes. And there was some software for managing playlists. But all of these things were not integrated by a single company, and MP3 player sales were sluggish. The first MP3 player was introduced in 1998. By 2001, sales had reached a modest 750,000.


Stan Drobac 2011-12-15 04:36:28 PM
Consultant Mark – Good points, as always. You’ve been pointing out the need for complete solutions for some time now, and I think most of us in the business understand that at least to some degree. As you note, though, pulling together all of the pieces is a tall order, even for the Fortune 500 players among us. Still, there are at least a couple of firms that have indeed produced complete solutions. Interestingly, the ones that I am aware of are small outfits, not big multinationals. They have chosen vertical markets they know well; have carefully selected, customized and tested the hardware; and have built the necessary software to pull it all together and interface with the systems that they know their target customers use. On top of that, they have decided to take risk out of the equation for their customers by installing systems at their own expense and charging only usage fees. As I write this, it occurs to me that the approach may actually be more suitable for a startup, despite the breadth of capability required. At the core of the complete solution is a deep understanding of the customer’s situation, not necessarily and expertise in software, tags or readers. Hence an entrepreneur with roots in a vertical market may have a better shot at fashioning a solution than the biggest tech hardware or software companies. Of course, if one of the big players really decides to commit – and to bring in the right expertise – they could indeed accelerate the process.
Jessica Saila 2011-12-16 01:16:36 AM
Challenge accepted! Mark, I believe you state what at least many retailers would appreciate: an easy approach to RFID adoption. The question that I believe remains is, if vendors who can provide the "whole kit" to retailers create a ready choice, will there only be the "one apple"? Consumers can prefer a brand, but at least retailers tend to like their choice... So what is that choice if there is an Apple in the RFID world. I think all of us would love to be the Apple's of RFID and hence I accept the challenge to become it.
Monto Kumagai 2011-12-22 12:58:52 AM
Consumer-based advertising Mark, I think that there are huge opportunities in consumer-based advertising using RFID technology. This is a wide-open field that transforms consumer products into personalized trophies. In this process, customers interact with RFID-tagged products. Using cell phones, they individualize items by writing links to personal memories, music, photos, and videos directly onto consumer products. At a latter point in time, they are able to instantly recall, display, and share their experiences through near field communication (NFC) interactions. Since the information resides on their cell phone, the customer is able to broadcast their consumer reviews, opinions, and stories to the global community via email, SMS, and social networks such as Twitter and Facebook. In response, companies reward consumers who are efficient in sharing their experiences with free coupons, food, drinks, and music. Look for NFC consumer-based advertising products in the near future. It may be the next iPod.

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