Five Predictions for ’07

When making predictions, it is edifying to look back before you look forward. Last year I predicted that the RFID market would grow but not boom; EPC Generation 2 would clean up in UHF; some companies using RFID because of mandates would find business cases; China, Japan and Korea would take steps toward EPC; and big technology companies would enter the market at the expense of some little ones.

These were broadly correct, but not perfect. I got Japan wrong—it is lagging due to local regulations that show no sign of changing. And most mandated adopters still slap on tags and ship their products with no plan to get value for their companies. However conservative I try to be, some things just take longer. With that lesson in mind, what might 2007 hold?

1. Big performance improvements.

Standards ensure competition, and competition powers innovation. At least five companies are now producing silicon chips for Gen 2 tags: Alien Technology, Impinj, NXP, ST Micro and Texas Instruments. Competition among these companies is delivering dramatic improvements. Alien’s new integrated circuit, called Higgs, is the highest-performing tag silicon I’ve seen—so far. Competition will result in continuing improvements in all parts of the RFID system, from tags to readers and software.

2. Readers on a chip.

The climax of any electronics revolution is integration—when a circuit board containing thousands of soldered electronic doodads is reduced to a square of silicon smaller than a postage stamp. Chip-based systems are cheaper, faster and need less power than their circuit-board ancestors. Integration created breakthroughs in computing, networking, cell phones and RFID tags. In 2007, we’ll see the move to high-performance UHF readers on chips. It will take a few years, they may not work as well as conventional readers and prices won’t drop overnight.

3. The year of the closed loop. It is easy to assume that open standards are for open systems—applications that require the exchange of data between companies that use different information technology. But EPC technology has also been adopted, albeit quietly, for applications working solely within a single company, such as document management and office tracking. These closed-loop applications will become more prominent over the next 12 months, as companies realize they can benefit from the innovation and price reduction standards deliver.

4. Security.

It’s an inconvenient truth that low-cost RFID systems are not as secure as they need to be for ubiquitous use in public environments. Today, any reader can read any tag, and any tag can be read by any reader. For real security in public places, it’s essential to make sure tags can be read only by authorized, authentic readers. RFID vendors and standards groups should begin to address this need in 2007.

5. Item-level tagging rumors.

RFID will be applied to lots of consumable items. While that’s unlikely to happen on any widespread basis in 2007, plans and ideas will lead to a swirl of rumors and speculation from analysts, vendors and users that item-level tagging really is on the way.

Kevin Ashton was cofounder and executive director of the Auto-ID Center. Illustration By James Steinberg.