Global RFID market to hit $3 billion by 2007, says Wireless Data Research Group
The Wireless Data Research Group (WDRG) says the market for radio frequency identification (RFID) hardware, software and services will increase at a 23% compound average growth rate (CAGR) from more than $1 billion in 2003 to $3 billion in 2007. According to the research, the adoption of RFID for inventory and supply chain management applications, coupled with the finalization of a global air interface standard and architectural framework, will add significantly to the already growing base of RFID applications.
The study found:
- Transponder revenues will grow at an 18% CAGR and reach nearly $1 billion by 2006.
- Professional services for engineering, implementation and system integration will grow to $986 million in annual revenues during the next five years.
- Although open standards and advanced production processes will cause steep price declines for RFID tags, worldwide revenues from UHF transponders will increase by 23% through 2007.
- The Americas will continue as the leading region for RFID sales, comprising more than 40% of the total world market.
Despite the optimistic outlook, there are some outstanding issues that need to be addressed as the market continues to mature, including:
- Scalable system operation with heterogeneous vendor environments.
- Steep costs for custom application development and legacy system integration.
- Consumer privacy concerns with regard to retail and consumer packaged goods tracking applications.
- Competing standard development efforts between EPCglobal Inc. and the ISO.
“As the RFID industry moves from a silent revolution to a very public evolution, recognition of the importance of automated identification and data capture will reshape the way enterprises manage their supply chain as well as their vendor relationships,” says WDRG’s Principal Analyst Ian McPherson. “Trials with open platforms like the EPC network have proven that the technology works. Now the vendors must prove that the information infrastructure scales to support this new interconnected enterprise without breaking the users’ budget.”
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