This article was originally published by RFID Update.
October 31, 2005—ABI Research has released a report projecting phenomenal growth for RFID products and services within the secure identification and homeland security sectors. Entitled RFID Border Security Markets, it predicts a market value of approximately $3 billion in 2009, up from a comparatively nominal market value in 2004. RFID Update spoke with ABI Research analyst and author of the report Sara Shah about her findings.
Shah said that the market today is very modest and “is basically just getting off the ground now.” But given accelerating interest in using RFID for government-issued documents like passports, national identification cards, visas, and driver licenses, this will change rapidly over the next few years. “The volume for this market is going to be huge by the time 2009 rolls around,” she said.
Shah sees electronic passport (“ePassport”) initiatives as driving the early adoption of RFID for use in identification documents. “EPassports are paving the way for RFID to be incorporated into various other forms of identification,” she said. (Just last week, the U.S. State Department announced that all passports issued in October 2006 and beyond will be electronic. See our story.) Eventually, other identification documents — like national ID cards — will contribute to demand alongside ePassports. She specifically cited China’s national ID initiative, which will see that country’s one billion citizens carrying RFID-chipped identification cards.
The secure ID and border security RFID market is quite different than that of the more talked-about supply chain market. When RFID is applied in the supply chain, security is far less of a consideration than read range and low cost. “The concerns are very different” for RFID use in identification documents, where security is a top priority and the read range is intentionally limited to short distances. Indeed, many of the vendors playing in this space have gone out of their way to avoid being considered “RFID vendors.” The phrase “RFID” is now closely associated with concepts like Wal-Mart, consumer goods, and long read ranges, none of which engender a sense of tight security. The vendors want to distance themselves from the phrase, therefore, because security is such an important selling point.
So who are the vendors that will comprise this $3 billion market? “It’s primarily the top vendors in contactless payments that are becoming the top vendors in the border security market,” according to Shah. Examples include Gemplus, Axalto, Infineon and Philips. The identification and border security market “gives these companies a new market for their existing or similar products,” she said. Asked if the explosive prospects for this market will attract startups and venture capital, Shah said no. The awarding of government contracts for national ID cards, ePassports, etc. requires considerable time, so “if you aren’t in it now, it’s going to be hard to get in it.”
Read the ABI Research press release about the report