RFID Tag Market Seen Approaching $3 Billion in 2009

In-Stat projects significant impact on efficiency of business processes, but cost, privacy concerns seen slowing adoption

In-Stat projects significant impact on efficiency of business processes, but cost, privacy concerns seen slowing adoption

Scottsdale, AZ — January 12, 2005 — Radio frequency identification (RFID) tags are poised to become the most far-reaching wireless technology since the cell phone, with revenues from RFID tags set to hit nearly $3 billion by 2009, according to a new report from high-tech market research firm In-Stat.

Worldwide revenues from RFID tags will jump from $300 million in 2004 to $2.8 billion in 2009, In-Stat said in its report, "RFID Tags and Chips: Changing the World for Less than the Price of a Cup of Coffee." During this period, the technology will appear in many industries, with significant impact on the efficiency of business processes, the consultancy predicted.

"By far the biggest RFID segment in coming years will be cartons/supply chain," said Allen Nogee, an In-Stat analyst. "This segment alone is forecasted to account for the largest number of tags/labels from 2005 through 2009." Wal-Mart, which has mandated that top suppliers use the technology, will drive this market segment, In-State said.

The consultancy has also found that the widespread adoption of the technology will take a couple of years to really ramp up, as tags are still relatively expensive, ranging from a low of around $0.15 to a high of over $100.

In addition, privacy issues remain a concern for many applications of RFID, and currently courts and governments around the world are in the process of determining related legal issues.

In-Stat also suggested that the second-largest market for RFID, at least in the latter years of the consultancy's forecast, will be consumer products, even though this market is one of the most privacy-sensitive areas.

The report investigates the many uses of RFID, looks at the costs of making the tags and examines issues, including privacy, that could potentially slow its momentum.

For a contrary view of the future of the RFID market, see the article "The O'RFID Factor: A 'No Spin' Look at Where Radio Frequency Identification Is Headed," in the October/November 2004 issue of Supply & Demand Chain Executive.

For more information on trends relating to radio frequency identification, follow this link for an extensive listing of SDCExec.com articles, featuring the latest research findings on the RFID, including adoption, return on investment and barriers to implementation.