UHF RFID and Ambient IoT: The Differences Are Smaller Than People Think; The Implications Are Bigger

Published: October 29, 2024

Like all technologies that eventually reach game-changer status, the journey of UHF RFID has been long and arduous. This breakthrough took decades to reach its full potential, as the technology evolved, the market educated, and the ecosystem built out. Today, UHF RFID is reimagining industries and supporting robust omnichannel strategies by enabling clear views of supply chains.

Those who recall the initial excitement surrounding UHF RFID will find familiar echoes in the reaction to ambient IoT—a long-developing auto-ID technology that promises to change the way things are done. Ambient IoT refers to the class of connected IoT devices that harvest naturally available energy sources. It is catnip to those of us who believe the world can be better if we harness the combined power of automation and the internet to go beyond barcodes, cameras, and keyboards; to apply the power of the cloud to the “things” around us.

Ambient IoT is relatively new compared to UHF RFID, the latest version of which was standardized at the turn of the millennium. While the technology further amplifies the benefits created by RFID through improved supply chain visibility, on the surface they appear very different.

Common Bonds

But ambient IoT has more in common with UHF RFID than you might suspect. This is primarily driven by shared vision across technologies. As new as ambient IoT is, it arrives with the same messaging shared by many of the players who championed the capabilities of UHF RFID decades prior.

That’s because the ambient IoT evolution has led to developments that build on previous innovation, opening new markets and, in many ways, enabling the original vision for UHF RFID. In fact, those who pioneered UHF RFID are the best qualified to do the same for ambient IoT, both being passive solutions that require no batteries.

That includes Avery Dennison a global leader in materials science and digital identification solutions, whose strategic vision has enabled it to hold a leadership position in both UHF RFID and ambient IoT. It has invested in, and worked closely with Wiliot, a cloud-based ambient data platform company that also designs the chips that power this latest generation of ambient IoT tags. Over the years, Avery Dennison has advised its customers to use a range of technologies based on what is most likely to achieve success for the use case in question.

For anyone to make that call while also being ready to capitalize on new technology, it’s essential to understand the differences and similarities between ambient IoT and UHF RFID and to fully understand how to strategically deploy each or both, depending on the use case.

We don’t argue which is better, because that would be like arguing that a hammer is better than a wrench. Choosing the right tool depends on whether you’re hanging a Picasso or fixing a leaky sink.

Key Differences Between Ambient IoT and UHF RFID

Going forward, we will use RFID as a shorthand for UHF RFID and all related technologies, like passive, battery-free RAIN RFID technology.

RFID and ambient IoT are both radio frequency identifiers, with many of the same manufacturing systems used to assemble these two different kinds of auto-ID tags. Unless you have an expert eye, you may not be able to tell them apart. Yet their differences have significant implications.

Difference #1: Value and Sensing Requirements of Tracked Items

For item-level tracking throughout the supply chain and in warehouse and retail environments, RFID is typically the most cost-effective option, generally providing a return on investment within one year. But as the value of tracked items increases, or if the assets need to be tracked across many locations with additional sensing capabilities, ambient IoT becomes the better choice.

Why? As with all such things, it’s important to consider value delivered vs. the total cost of ownership.

Currently, RFID tags are typically less than half the cost of the latest generation of ambient IoT tags. But the price of tags is only part of the story — ambient IoT readers generally cost much less than RFID readers. In both cases, the total cost of ownership includes investment in tags, hardware, software (cloud) and services. In the case of ambient IoT, software enables multiple data streams and use cases, further driving potential value. In some cases, ambient IoT readers may effectively become nearly cost-free, as more existing “smart” and mobile devices receive firmware upgrades that enable compatibility with ambient IoT, which improves both hardware and installation costs, while enabling new cloud-enabled revenue streams. In other words, ambient IoT benefits from advances in the tech stack of adjacent, complementary infrastructure.

The ingenious strategy behind ambient IoT is to leverage the readers all around us: the low-cost commodity radios that are embedded in numerous enterprise and consumer devices, from Wi-Fi access points and smart appliances to doorbells and phones. These radios were designed for communication, not auto-identification.

So, to make the energy harvesting at the core of ambient IoT work, we leverage new semiconductor technology that allows us to move the intelligence required for this low-power communication into the tag itself. RFID uses a dedicated radio frequency with custom readers and antennas, allowing high performance and high density reading, with read validation.

Difference #2: Compute Power and Battery-Free Living

This “intelligence migration” into what used to be “dumb things” is thanks to the architecture of ambient IoT tags, which have more computing power than RFID tags. Beyond enabling additional power management functions, this boost enables tag functionality such as temperature, humidity, light and other sensing, as well as end-to-end encryption.

And despite being battery free, today’s ambient IoT tags include active radios, which means they are FCC certified. By comparison, passive RFID tags work by reflecting and re-modulating a strong radio signal from a sophisticated reader, which dissipates in strength. This can correlate to a reduction in range, which could limit some use cases based on read distance required.

All this capability in an ambient IoT tag increases the cost by mere pennies. While that may be significant at very high volume, the cost of ambient IoT infrastructure is lower, as more devices and locations are equipped to energize and read the ambient IoT tags.

Differences in Energy Harvesting, Cloud Integration

It’s important to understand other differences that factor into deployment decisions.

First, ambient IoT harvests the radio energy it needs over time. This means it can get its energy from weaker signals and eventually transmit a stronger signal than any it received. Imagine a bucket in a water park that gradually fills up, and once it is full, it flips over and broadcasts its contents over the surroundings. In the case of ambient IoT, the bucket is a tiny capacitor that can charge in less than a second or over a period of minutes, depending on the radio energy available.

Then there is the subject of read rates. RFID broke new ground when it was introduced. Its pioneers faced demands from CIOs for faster read rates with lower packet loss. Their requests made sense. To switch to this new auto-ID technology, early adopters wanted to see 99 percent-plus read rates from RFID, especially if those reads could only be made in an instant, like at a choke point, or by a handheld reader.

The read-rate philosophy of ambient IoT is different. To quote one VP of supply chain at a leading grocery chain, “I don’t care about read rates, I care about visibility.”

It turns out that for many use cases, if you have low-cost readers everywhere, you can sacrifice a few points in the read rate of an individual reader. That’s because even if a tag isn’t read instantly, it will be read later, either by the same radio or by another radio in a pervasive, ambient constellation of Bluetooth devices.

Continuous Broadcast Capabilities

Now, too, cloud computing can be used with ambient IoT as part of a continuous monitoring process to track the movement of things in space. This shifts auto-ID data from a single snapshot (a scan or a read) to a continuous stream, tracking inventory movement over time. Using the cloud and AI, ambient IoT is able to mitigate a bugbear issue that all RFID architects once faced: laws of physics that prevent radio waves from passing through liquids or metal. Recent advances in RFID technology have led to improved read-rates on foods and liquids, as well as microwave safe tagging, opening up further possibilities.

Historically, tags featured on a case of liquid detergent—surrounded by other cases of liquid detergent—could not be read. The liquids between the tag and reader absorb the radio waves and make it impossible to track the inner, middle cases.

But if you monitor each case of detergent with ambient IoT as it is loaded on a pallet, and if you use an AI algorithm on the data held in the cloud, you can understand what is happening. You know a pallet is being loaded with a certain number of cases of liquid detergent.

Even if the tags at the core of the pallet cannot be read, as long as the ones that surround it are still in place, the cloud analytics platform knows they’re there. And by tracking the readable tags, the ambient IoT understands them to be moving together with their neighbors, until the point in time when the cloud “sees” the pallet being broken down and the middle cases “reappear” in a new location.

While this is possible to do with RFID technology, ambient IoT lends itself better to this due to its continuous broadcasts and multiple read points logic.

Ambient IoT and UHF RFID as Complementary

So how do the differences between ambient IoT and UHF RFID complement each other?

Physical infrastructure is an area where ambient IoT and RFID offer mutual support. For example, a small number of handheld readers, rather than implementing blanket coverage throughout a warehouse or store, can reduce RFID costs while integrating with ambient IoT. Here’s a real-world example: One mega-scale grocery retailer is deploying RFID at the item-level while also using ambient IoT tags to track pallets and cases of inventory. The comparatively lower-cost RFID scales across the full range of inventory, as tags are generally read using handheld readers. Although the high-performance RFID readers cost more, they don’t need very many.

At the same time, ambient IoT tags on cases and pallets can be read continuously and automatically using low-cost Bluetooth—without staff involvement and across a wider range of locations in the supply chain. By using both auto-ID technologies, the grocer enjoys the best of both worlds, enabling a more robust omni-channel experience, with less inventory, less waste, and better on-shelf availability.

Other industries may have other usage models based on the same principles. Apparel, for example, RFID tags on garments, which only need to be scanned periodically with a small number of handheld RFID readers, are a good fit.

Use in Health Care  

Meanwhile, in another real-world example, a large postal carrier has applied ambient IoT tags to hundreds of thousands of rolling cages. These rolling cages have a lifespan of many years, so the amortized cost of tags is relatively insignificant.

The cages are like the white blood cells carrying oxygen around the body of their logistics network. If you don’t have enough in the right place at the right time the system dies, so the value of understanding their location and optimizing the use of the delivery vehicles that carry them between sorting centers is very high.

For the postal carrier, because the Bluetooth infrastructure is so affordable, it has been able to put readers in each of the thousands of vehicles that make up its fleet. That allows benefits to multiply: Because the vehicles move tagged, reusable transport items (cages) among sorting facilities, the carrier can track the utilization of vehicles and routes in real-time with no manual scanning, thus improving operational compliance, efficiency, and visibility.

Developments at the Crossroads of Ambient IoT and UHF RFID

Other developments, which are changing over time, will impact the decision of which auto-ID tools to use. For instance, RFID has a two-decade head start in amassing diverse tag conversions and antenna designs that work on different materials. Currently, ambient IoT tags work on fewer materials; we don’t yet have a version that is safe to use in microwaves.

However, the ambient IoT industry has the capacity to build out its catalog. The ambient IoT multi-processor/ARM chips at the heart of the tags have extra functionality that will ultimately extend the utility available to solution architects beyond UHF RFID. Every ambient IoT tag includes temperature sensing. And there is already a roadmap to ambient IoT tags that can scale to include light and humidity sensing at very low cost.

The ubiquity and end-to-end visibility enabled by ambient IoT is evolving, too. Today, Bluetooth radios are not only in phones, but they are also in Wi-Fi access points (APs), smart speakers, doorbells, security cameras and appliances. Most Wi-Fi APs and all phones can already receive the broadcasts from ambient IoT tags.

The firmware upgrades, apps and hardware tweaks required to activate other devices with Bluetooth radios, such as home appliances, are still evolving and will take time before they can join the ambient Internet of Things.

Expansion into Wi-Fi

In fact, the next shoe to drop in the evolution of ambient IoT is the integration of the wider Wi-Fi and cellular industries into this connected world of things. Thanks to the next version of 5G, 5G Advanced, Ambient IoT will soon enjoy native support via the powerful cellular radios that surround us wherever we are. It is also being integrated into Wi-Fi by the IEEE as part of 802.11bp or Wi-Fi 8. This will bring into the ambient IoT industry tech giants that have, until now, largely sat on the sidelines of IoT development.

When the wireless carriers and enterprise Wi-Fi players go all-in on ambient IoT, there will be more marketing dollars and more innovation. It will take until the end of the decade for all of this to play out, but as it does, the existing opportunities for businesses selling and using auto-ID technologies that can use Bluetooth ambient IoT now will only grow.

Finally, note that ambient IoT’s early focus is on enterprise use cases. But the road to linking consumers’ products in their homes directly to manufacturers through ambient IoT is clear. This will enable new retail models, such as product-as-a-service subscriptions, to everyday consumables.

Such a consumer-facing ambient IoT will take time to develop. And the industry will need to make use of standards like GS1 EPCIS to get there. But visibility downstream from the manufacturer to the consumer will be possible, thanks in part to ambient IoT.

Conclusion

UHF RFID and ambient IoT share similarities and are both means of Intelligent Labeling. They are also both examples of how early can feel wrong, until they are proven right in the long term.

We’ve discussed their unique capabilities and the challenges they address, and now, like a seasoned craftsman reaching for the right tool from their toolbox, solution architects can choose the perfect auto-ID technology for each step of their journey toward a more connected, sustainable world.

Whether it’s ensuring the freshness of groceries, tracking life-saving medical supplies, or simply finding keys in the morning rush, the combination of RFID and ambient IoT can be used independently and in tandem to make lives a little easier, a little more efficient, and a whole lot more exciting.

We are thrilled to be part of this journey and can’t wait to see what the future holds. As we continue to push the boundaries of what’s possible, we’re all in it together.

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About the Author: Francisco Melo, President, Avery Dennison, and Tal Tamir, CEO, Wiliot

Francisco is a global leader in digital technology solutions with over 20 years of experience in enterprise strategy and new technology adoption. As president of Solutions Group at Avery Dennison, Francisco is responsible for evolving and developing the business strategy and leadership at the intersection between the physical and digital world to drive value creation for customers across multiple industries. In recent years, Francisco spearheaded the growth of our RFID business and led the development and growth of Avery Dennison Smartrac. He has also overseen the acquisition of several technology companies, investments in leading tech startups, the acceleration of the company’s digital ID portfolio and the launch of atma.io – a product cloud solution that unlocks the power of connected products. As the co-founder and CEO of Wiliot, Tal Tamir leads the company’s mission to transform the way products are made, distributed, and sold via revolutionary ambient IoT technology. Prior to helping found Wiliot in 2017, Tal was a Vice President of product management at Qualcomm, and CEO / co-founder of Wilocity, the millimeter wave pioneer purchased by Qualcomm. Tal earned an MBA from Northwestern University, Kellogg School of Management in 2001.