Gen3 RFID and the Rise of Ambient IoT

Published: April 30, 2024


  • The ambient Internet of Things (IoT) it represents the true, third generation of RFID technology.
  • With the advent of ubiquitous, low-cost, scan-free tracking, the two are one and the same.

In the beginning, there was radio-frequency identification, a generic descriptor for an innovative technological capability. Birthed during World War II to monitor aircrafts with radio waves, first-generation commercial RFID applications emerged in the early 1970s for access control, animal tracking, and transportation management. Gen1 RFID typically operated at low frequencies, with limited functionality, range, and data rates, although at high cost, due to the prevalence of proprietary tags, readers, and software.

And it was…okay. The way a horse and buggy was an okay mode of transportation before the internal combustion engine, or Norton Antivirus was an okay means of protecting your computer before firewalls—and eventually cloud-based security.

Second-generation RFID grew out of technological improvements in the 1990s and officially entered the scene in 2003, when GS1, the international standards body, launched EPCglobal for developing RFID standards. Widespread adoption, interoperability, enhanced performance, and advanced features led to an explosion of Gen2 RFID applications and use cases, from warehouses and supply chain tracking to retail inventory and asset management.

Defining Gen3

So, what of Gen3 RFID?

For the last 20 years, companies have sought to develop (and some even trumpeted) a third-generation RFID. The closest the industry has come—based again on standards necessary to sustain RFID’s growth and utility—is the laudable Gen2v3 of GS1’s EPC RFID protocols, released in January 2024.

But at the same time, a new radio-frequency ID technology has emerged, centered on ubiquitous, ever-present, RF-based Bluetooth communications. This platform combines ultra-low-cost, self-powered radio tags; off-the-shelf and existing Bluetooth infrastructure; and, notably, a cloud-based backend for turning tracking data into intelligence.

Known throughout industry as the ambient Internet of Things (IoT), it represents the true, third generation of RFID technology. And it’s here now.

Moving to Scan-Free Identification

To its credit, Gen2 RFID has been a revelation. By some measures, nearly 40 billion passive RFID tags were sold last year — a boost of roughly 20 percent—including high-frequency versions used in contactless payment systems and ultra-high-frequency tags used for tracking goods.

But there are several important ways to improve on Gen2 RFID that are accomplished by ambient IoT. Among the most important:

  • Eliminate the need for dedicated scanners, which would reduce the cost of an RFID deployment by up to 100X;
  • Cloud-enable the ID platform, effectively liberating tracking data from their sources and turning massive data streams into manageable insights;
  • Incorporate end-to-end encryption to protect data ownership and privacy;
  • Enable the platform for advanced features, like sensors that wirelessly transmit temperature, humidity, and other factors; and
  • Make it ubiquitous. With ambient IoT, there is no reason wireless data exchange must be limited to locations where things are scanned. Things should be “sensed” everywhere.

To illustrate, today’s warehouses, shippers, retailers, and others exploit Gen2 RFID to track products and packaging. It’s effective—to an extent. One downside is that it requires RFID scanners, either handheld or purpose-built into distribution hubs and other locations. The latter are expensive, the former must be wielded by workers, who represent additional cost and, frankly, may unintentionally introduce human error into the scanning and tracking process.

Ambient IoT, or Gen3 RFID, is “scan-free” because it exists all around us. Stamp-sized compute devices called IoT Pixels, affixed to products and packaging, communicate through Bluetooth over a pervasive network of existing devices, such as smartphones and wireless access points, and off-the-shelf routers in warehouses, delivery trucks, retail stores, and elsewhere. They’re perpetually communicating their location, status, condition, and movement with the ambient infrastructure, eliminating the need for RFID scanners and readers.

This is a generational advance beyond current RFID standards and offers something past platforms sought but struggled to attain: data availability all the way to the consumer.

Gen3 Delivers What Other Techs Promised

To date, a push to include prior-generation RFID in smart appliances, electronics, security systems, and more has stalled—in large part over cost. But in the modern household, it’s not uncommon to find multiple Bluetooth-enabled, Internet-connected devices, such as smartphones, tablets, smart speakers and TVs, and even kitchen appliances or home automation devices.

With the proper privacy controls and end-to-end encryption in place, ambient IoT Pixels can communicate via existing Bluetooth devices. By exploiting a successful, ubiquitous, standards-based wireless transport, not only does ambient IoT build on Gen2 RFID, but it also delivers on the original promise of an Internet of Things.

Ambient IoT gains further strength from its integration with cloud systems. Gen2 existed before the cloud existed; cloud-native ambient IoT allows companies to harness sensed data, enabling, for example, digital product passports, which global organizations are developing to promote traceability.

With ambient IoT constantly communicating data back to the cloud, this Gen3 RFID platform delivers a complete technology stack for such initiatives. It’s what makes it possible for a worker in a supermarket to interpret a product’s digital passport one way (with a ripeness score, perhaps) and a consumer to view it another (maybe its farm source or organic certification). But it’s all based on the same data, sensed and then assembled in the cloud, and tied to the product’s unique identifier — a standardized identifier that exists in large part because of the foundational efforts of earlier RFID generations.

An Evolution of Legacy Technologies

Innovative as it is, ambient IoT as Gen3 RFID is evolutionary. It builds on standards already well established. In fact, leaders in the development and adoption of first- and second-gen RFID are already on the cutting edge of ambient IoT, keenly aware of its ability to advance a true, powerful, and ubiquitous Gen3 RFID. Makers of Gen2 tags, for instance, are some of the earliest mass-producers of ambient IoT Pixels, which will eventually number in the trillions.

Ambient IoT is already making its way into the telecommunication standards that underpin Gen3 RFID — Bluetooth, 5G Advanced, and 802.11 AMP. In this way, the RFID ecosystem expands dramatically to include enterprise (WiFi) and telco (GSMA) platforms, which is a boon to companies and consumers. And employs standards-based AES 128-bit encryption and authentication for protecting data as it moves among IoT pixels, wireless network devices, and the cloud — a necessary advance for Gen3.

Like new generations of technology, Ambient IoT—Gen3 RFID—will coexist with prior generations and in some ways be enhanced by them. For example, self-powered IoT Pixels can even harvest energy from existing Gen2 RFID scanners, giving the combined platform greater performance.

After all, in the early years of the internal combustion engine, automobiles shared the roads with horses and buggies. And while it’s clear the Gen3 of cars is electric, the near future is one of both ICE vehicles and EVs of various kinds. Just ask any traditional car maker — they’re planning for that future.

Ambient IoT represents the way future generations will use radio frequency identification to track, trace, monitor, inventory, transport, consume, use, reuse, and recycle physical products in a digital world. All the companies that cut their teeth on Gen1 and Gen2 RFID, putting in the hard work to establish those foundations, stand to be the biggest beneficiaries of Gen3. The transition to ambient IoT starts now.