Value propositions drive RFID adoption

ABI Research believes the RFID market is incredibly diverse while offering strong growth potential

The increase in available RFID technology and applications suggests that the market is moving beyond traditional closed-loop application environments. From historical applications (such as security/access control, animal ID, toll collection, and automobile immobilisation) to the hot-right-now asset management and open-loop supply chain applications, ABI Research believes the RFID market is incredibly diverse while offering strong growth potential.

Many organisations are considering RFID as a means of business process improvement -- enabling a more visible and effective supply chain, better tracking of corporate assets, and so forth.

"RFID has the potential to transform business operations and to offer significant business advantages, but more pilots and trials have been made public than full-scale implementations," observed ABI Research director Michael Liard. "It is important to make this distinction, because some organisations keep quiet about their RFID work to gain a competitive edge."

But pilots are necessary growing pains of any maturing market, and organisations see the overall benefits of conducting RFID pilots, along with the subsequent implementation. Many are underway in the RFID space across vertical markets and applications. Immediate high-profile pilots and implementations involve major automotive manufacturers such as Airbus, Boeing, Hong Kong International Airport, iGPS, Marks & Spencer, McCarran Airport, Metro, Tesco, US DoD, and Wal-Mart, among others.

"What began as pilots have now progressed into wider implementations," continued Liard. "ABI Research conversed with end-users and discovered that RFID technology reliability -- and the business case -- can often trump cost as the leading consideration in RFID technology selection." And this suggests that companies are welcoming RFID as an integral part of business processes and operations.

From simple closed-loop applications, such as security/access control in an office building, to complex open-loop applications, such as item-level tracking, RFID technology offers unique identifying and data-capture solutions across regional, vertical, and application markets.

"Undeniably, the market has big plans for RFID. Its use is expanding rapidly with expectations of significantly greater growth and high-volume applications, thereby influencing a broader set of verticals and industries," Liard said.

Len Rust is publisher of The Rust Report

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