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The Booming RFID Business in 2010

June 23, 2010
There is money in RFID. Alanco Technologies, which provides RFID-based inmate tracking systems, announced sales increased 42 percent to $19 million for the fiscal year ended June 30, 2009. The U.S. Army continues to place the world's largest RFID contracts at around $500 million each and many smaller orders that are still substantial. For instance, in October 2009, Savi, a Lockheed Martin company, was awarded orders totaling $6.6 million for RFID systems under the U.S. Department of Defense's RFID III procurement contract. The RFID tags, which are affixed to cargo containers and other supply chain assets, comply with the ISO 18000-7 standard (also called DASH7), enabling near real-time supply visibility and interoperability with allied defense forces and government organizations.

All these activities involve active RFID, the type that is growing sales fastest, increasing its share of the RFID market. This can be seen from the world's largest database of RFID projects, the IDTechEx RFID Knowledgebase which has over 4,000 case studies in 111 countries. Roughly speaking, active RFID has risen to about 24% of projects and a little less in terms of money spent—double its penetration a few years ago. These tags are mainly plastic moldings.

There are three types of active RFID system. First Generation is one tag per reader, the battery and chip in the tag usually enhancing range and/or managing sensors. Second Generation is Real Time Locating Systems (RTLS) as particularly seen in US hospitals and car production lines in the last few years for locating people and assets. Usually several interrogators read each tag to give position in 3D. Finally, Third Generation is Wireless Sensor Networks (WSN) which are self organising, self healing tag networks rather like the internet with every tag doubling as a reader. WSN sales (military, process industries etc.) have recently overtaken RTLS sales.

Passive RFID success
Passive RFID also makes the financiers pleased. It is usually in the form of labels and cards these days. For example, contactless (ie RFID smart cards) are commonly used for storing notional value that is then spent down by the user. The London Oyster card is the largest such project in the West, though it a fraction of the size of the Suica scheme in Japan or various Chinese city cards, each of which is two to four times as big.

Nearly 30 million GBP is lying unused on pre-pay Oyster cards, transport chiefs have revealed. Financial rules will allow this to be gradually taken to profit. The money is on cards lost, broken, stolen or simply no longer needed by tourists who have left the country. About 16.5 million cards sat idle from April 2009 to May 2010. The average remaining on each was 1.80 GBP. In 2009, 31,000 Oyster cards were issued and topped up but never used, even though they held 246,000 GBP worth of travel, according to information obtained by the BBC. About seven million are now in use and pay for 57 million trips a week on the subway, buses and trains.


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