RFID Picks Up Momentum

Further efficiencies expected in supply chain, according to ABI

Oyster Bay, N.Y. — July 9, 2003 — Radio frequency identification (RFID) applications are branching out of traditional roles and taking on greater importance by chief information officers, logistics managers and even brand managers, stimulated by wartime investment in military logistics technology and a push for supply chain visibility. Research firm ABI estimates the global RFID market will grow to more than $3.1 billion by 2008.

The U.S. Department of Defense is only one of many organizations to dramatically increase RFID spending in the last year. However, according to ABI, the business cases can be made now that standards are finally materializing; innovations in manufacturing are driving prices down; and software, hardware and integrators of the two are working together to develop cohesive, compatible enterprise solutions.

According to ABI, asset and supply chain management application revenue will grow from 20 to 48 percent of this projected market. Initially, asset control, asset tracking, and container and pallet level supply chain management will propel the RFID market, the firm stated.

"But as indicated by the proliferating interest among the world's largest retailers, including Wal-Mart, Metro AG, Carrefour, Tesco and Ahold," explains Erik Michielsen, ABI Senior Consulting Analyst, "item-level tracking in the supply chain is no more than three to four years from widespread implementation." Developing markets, such as tire tracking and alternative point-of-sale purchase methods, continue to drive RFID innovation and deployment across a variety of markets and applications.

"The time to build business cases, deploy trials and grasp the intricacies of the RFID marketplace is now," affirms Edward Rerisi, ABI's director of Research. "With over three billion tag shipments expected by 2008, and with retailers and manufacturers already seeing positive returns on RFID investment, RFID will only gain more and more acceptance."

ABI's new report, "RFID: Emerging Applications Driving R&D Investment and End-User Demand," follows the technology for applications including asset management, supply chain management and point-of-sale. The study breaks down RFID standards, applications and vertical markets, and it provides marketplace forecasts through 2008.

Additionally, reader shipments and revenue are provided, as well as data on different RFID transponder and component markets. ABI also selected and analyzed RFID vendors, integrators, developers and IC manufacturers are, along with their various technologies and product offerings.