RFID is Poised for Change
IDTechEx
December 2007
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Firstly, selling RFID to consumer goods companies mandated by major retailers usually breaks one of the fundamental rules of marketing “Never sell to someone who does not want to buy from you”. Most of the consumer goods companies in the USA see no payback from fitting the passive UHF labels mandated by retailers, indeed, they may have lost a mutual $100 million so far trying to do so, despite the RFID suppliers losing a similar sum selling tags and readers to them at a loss. The consumer goods companies are therefore quick to point out the technical problems and they use any other valid reason to delay. The contrast with the booming sectors of RFID (almost all other sectors) is stark.
Some suppliers read the market correctly and prosper
When we look at the money spent, RFID is not a UHF business, though UHF is making inroads. In standards, it is not an EPCglobal business, though EPCglobal is making inroads. RFID is a business of tagging financial, access, identification and transport cards and tickets and tagging passports, library books and other things at HF, whether we look at the expenditure on tags or on systems. It is also a booming business in tagging pets and livestock with LF tags, but LF for beer kegs, gas cylinders, roll cages, trolleys and secure access is conceding ground to HF and, to a lesser extent, UHF. There are many companies primarily in HF that have more than $100 million in profitable, growing sales including NXP, ACS, Huahong and the RFID part of Gemplus. NXP and Motorola foresaw that the Chinese market for RFID would become one of the largest - indeed, this year it is temporarily the world’s largest market for RFID. These two companies, and a few others, have already established substantial sales in China.
Overselling
Although some companies that were wrong footed in prioritising UHF RFID for retailing have alleged that UHF will satisfy most RFID needs in future and HF has run out of development potential, this is far from true. To those that allege that HF is limited to one meter range and only then with a tag the size of a credit card, we must point out that DAG System and UPM Raflatac have long offered longer ranges and advances by Cambridge Resonant Technologies, in late 2007, promise a further 50% improvement. To those that say HF systems can only interrogate tens of tags at a time, we point to the global success of Magellan Technologies with Phase Jitter Modulation PJM underwritten by best-in-class-partners. Those tags can even be interrogated when they are touching.
Some suppliers read the market correctly and prosper
When we look at the money spent, RFID is not a UHF business, though UHF is making inroads. In standards, it is not an EPCglobal business, though EPCglobal is making inroads. RFID is a business of tagging financial, access, identification and transport cards and tickets and tagging passports, library books and other things at HF, whether we look at the expenditure on tags or on systems. It is also a booming business in tagging pets and livestock with LF tags, but LF for beer kegs, gas cylinders, roll cages, trolleys and secure access is conceding ground to HF and, to a lesser extent, UHF. There are many companies primarily in HF that have more than $100 million in profitable, growing sales including NXP, ACS, Huahong and the RFID part of Gemplus. NXP and Motorola foresaw that the Chinese market for RFID would become one of the largest - indeed, this year it is temporarily the world’s largest market for RFID. These two companies, and a few others, have already established substantial sales in China.
Overselling
Although some companies that were wrong footed in prioritising UHF RFID for retailing have alleged that UHF will satisfy most RFID needs in future and HF has run out of development potential, this is far from true. To those that allege that HF is limited to one meter range and only then with a tag the size of a credit card, we must point out that DAG System and UPM Raflatac have long offered longer ranges and advances by Cambridge Resonant Technologies, in late 2007, promise a further 50% improvement. To those that say HF systems can only interrogate tens of tags at a time, we point to the global success of Magellan Technologies with Phase Jitter Modulation PJM underwritten by best-in-class-partners. Those tags can even be interrogated when they are touching.
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