The Booming RFID Business in 2010

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.

Toughest market
The toughest market for passive RFID has been UHF labels for consumer goods suppliers to put on pallet loads and cases at the behest of the retailers but this business has largely collapsed because of technical and payback problems. Indeed, with RFID suppliers and consumer goods companies taking hundreds of millions of dollars of losses on this work over the last five years it has seemed more like a death wish than a market. There never was a prospect of payback for the CPG companies because having a silicon chip in the tags ensured that they could never drop to the necessary one cent or less in price. However, printed RFID tags with no silicon chip are now appearing in passive RFID tags initially in the form of contactless smart tickets.

Where the chip is needed in a UHF passive tag, price rises of around 10% have been accepted recently, partly because item level taggingis booming, notably of apparel for both civil and military purposes. These UHF labels have little water or metal to contend with, that upsets the signal, and the relatively high value of apparel means that paybacks are easily obtained.