Who's Buying RFID?

The automotive industry is driving the radio frequency identification market; retail is still waiting for shoppers

The automotive industry is driving the radio frequency identification market; retail is still waiting for shoppers

Oyster Bay, NY — August 22, 2003 — Despite the recent hype surrounding the introduction of radio frequency identification (RFID) technology in retail markets, the automotive industry will spend nearly 30 times more on the technology this year, according to a recent study prepared by technology market research firm ABI.

Representing about half of the total RFID market, the auto industry is poised to spend about $600 million on the technology, ABI reported. Key applications of RFID technology in vehicles include immobilizers, automatic vehicle identification, tire tracking and passive entry systems.

"While the technology has made its way into millions of production vehicles each year, growth potential also exists in the automotive supply chain," stated Edward Rerisi, ABI's director of Research. He pointed to full-scale deployments where suppliers identify their components with an RFID tag prior to shipment to the automotive assembly line. From this point, the OEM can track not only the shipment, but also the inventory status of the component after it has been received.

"It's a one-tag-fits-all solution, enabling the OEM to track shipments and work-in-process," continued Rerisi. "The same benefits that this technology can bring to retail supply chains are being realized — and proven — in the automotive supply chain."

ABI's most recent study on the RFID market, "RFID: Emerging Applications Driving R&D Investment and End-User Demand," revealed that automotive applications represent 46 percent of the total market today. While this share declines to 28 percent of the total market by 2008, the automotive segment still shows positive growth in the market, as other segments begin to represent more significant portions of the market.

ABI said it publishes market research and technology intelligence on the wireless, automotive, electronics, networking and energy industries.

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