|Home||Internet of Things||Aerospace||Apparel||Energy||Defense||Health Care||Logistics||Manufacturing||Retail|
RFID Tag Market in Flux
EPCglobal’s selection of Generation 2 standard will cause a swift surge in supply and demand and a shift in market share, predicts ABI Research.
Jun 07, 2004—In October, EPCglobal, the organization charged with commercializing Electronic Product Code (EPC) technology, is expected to ratify one standard, from a field of two competing proposals, as the Generation 2 EPC air-interface protocol. When it does, the EPC landscape will undergo a seismic shift, according to ABI Research, in Oyster Bay, N.Y.. The supply of EPC tags will immediately skyrocket, and some manufacturers—those that submitted the winning proposal—will race ahead of the rest, at least temporarily, according to ABI principal analyst Erik Michielsen.
At a meeting EPCglobal's Gen 2 Working Group held late last month in Anaheim, Calif., the number of proposals for a Gen 2 specification was reduced from three to only two (see And Then There Were Two). Each proposal is being promoted by a different consortium of providers of RFID and related technologies. The Global Proposal (formerly known as the Unified Proposal) is backed by 15 companies, including Intermec, Philips Semiconductors, SAMsys Technologies, Texas Instruments, UPM Rafsec, EM Microelectronic Marin, and Zebra. The newly created Freedom Proposal (combining some of the features of the Q and the Performance proposals, which were withdrawn during the meeting) is backed by Atmel, Matrics and Alien Technology.
Michielsen believes that, regardless of which companies dominate the EPC tag market today, that market will up for grabs in the months ahead. The Freedom Proposal’s backers include companies that are currently the market leaders for EPC tags (Matrics, which offers Class 0 tags, and Alien Technology, which offers Class 1 tags), but once the Gen 2 protocol is ratified, Class 0 and Class 1 chips will be phased out and replaced with Gen 2 chips. Consequently, says Michielsen, the advantages those companies have had will diminish.
Although there is a good chance that EPCglobal might merge the proposals into one standard, it is also possible that only one of the two sets of proposals will be chosen for adoption as Generation 2 UHF (868 MHz to 956 MHz) EPC air-interface protocol, which determines how tags and readers communicate. Even though the two proposals for the new Gen 2 standard vary little technically from each other, according Michielsen, the companies backing the winning proposal will have a distinct advantage in being able to get Gen 2 products to market quickly and win a large share of the market. The companies in the losing groups will require several months to establish design and fabrication capabilities based on the chosen standard.
“That delay can be even several months longer if they must outsource their fabrication,” says Michielsen, who predicts that millions of tags will be manufactured in the months immediately following the Generation 2 selection.
The October ratification of the new EPC standard will allow the prevailing group of manufacturers to put their own plan into immediate action, creating hundreds of millions of Gen 2 tags and selling them to companies that need to meet mandates from the Department of Defense and Wal-Mart. The giant retailer wants its top 100 suppliers to put tags on cases and pallets of goods shipped to it beginning in 2005.
In addition, Michielsen predicts, within weeks of EPCglobal’s ratification of the new Generation 2 standard, the International Organization for Standardization (ISO) will also accept the protocol. When that happens, then ISO and EPCglobal standards at UHF would be the same, and companies that buy and use RFID tags and readers could implement one protocol globally. That will push up even greater demand for tags in 2005, according to ABI research, causing tag prices to drop even faster.
RFID Journal Home
Attend RFID Journal University
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|