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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
Steve Jobs recognized that problem, and set out to fix it. Apple produced the whole product—iTunes would allow a user to import songs from CDs, manage playlists and seamlessly copy them to an iPod. The iPod itself was simple, elegant and easy to use. The MP3 market didn't develop step by step. Apple made the whole product and became the gorilla, and the market took off. The iPod went on sale in late 2001, and sales jumped to 1.6 million units by 2002. Two years later, the company was selling 4 million a year—more than four times the total sales before it entered the market.

Sales of tablet computers were less than 2 million in 2009. After Apple introduced the iPad, the market exploded. IHS iSupply, a market-research firm that describes the pre-iPad tablet market as "a sleepy niche of the mobile PC market" (see Global Tablet Shipments to Rise by Factor of 12 by 2015), expects sales to reach nearly 250 million units in 2015.

Could the same thing happen in the RFID industry? It's difficult to say. Creating a whole product that involves tags, readers, software and integration is a lot more complex than creating an integrated MP3 player. Except for a few companies that offer real-time location system (RTLS) software, few RFID firms sell tags, readers and software. One savvy business could buy the components of the whole product that it doesn't already sell, but this would be challenging, since software companies aren't necessarily good at producing hardware, and vice versa. A systems integrator might develop the software and put the whole product together for a specific industry, such as retail apparel. But I think the more likely scenario would be for a software player to become the gorilla by teaming up with a large tag supplier and a reader manufacturer.

To date, a truly unified solution has not yet been brought to market. It might just be a matter of time before this happens, but I'm not sure that's a given. Many companies are resistant to tight integration with a single partner, worried that this could close off market opportunities with other potential partners. It's not clear to me that any senior executive has the vision to partner with one or two other players to build an "RFID iPod." Most probably think the market will evolve step by step, and that all they need to do is hang in there.

As for the last point, that I "can't talk the RFID industry to greatness," that is, no doubt, true. I'm not arrogant enough to believe that anything I write can move the market. But my job, as a commentator, is to analyze what I see happening and to offer my views. Editorial writers for The Wall Street Journal or The Times of London can't talk governments to greatness, but that doesn't stop them from criticizing policies that they think are bad, and offering their own suggestions. I try to offer the most intelligent commentary I can produce. It's then up to RFID Journal's readership to embrace, reject or criticize my ideas, as they see fit. I love hearing from our readers—even when they don't like what I have written—so keep the comments coming.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog, the Editor's Note archive or RFID Connect.

USER COMMENTS

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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