The IDTechEx RFID Knowledgebase, the worlds largest searchable database of RFID in action, has reached 2000 cases, revealing surprising trends. In this article Dr Peter Harrop (pictured) analyses the trends.
Firstly, the largest number of case studies is in pallet/case tagging largely due to orders from consumer goods companies that are required to fit them by major retailers. However, item level tagging is now responsible for almost as many case studies and, apart from Type 2 drugs for certain Wal-Mart locations, these are sold to more eager customers that request them because they see a strong payback. Unit prices are therefore somewhat higher because, for example, US pharmaceutical manufacturers, Western aircraft manufacturers and libraries worldwide are prepared to pay to get superlative performance at item level.
Roughly equal to these two categories is the number of card, payment key fob and passport case studies. We can lump these together because they are non EPC and based on similar card-type specifications. However, here the big difference is that cards and passport RFID command at least ten times the unit price of pallet/case tags and suppliers are generally making money.
For a little longer, RFID therefore remains basically a card business by value of tags and systems, with lots of new case studies in financial, access and other cards being added all the time as the worlds credit, debit, account and identification cards gradually move over to RFID for convenience, reliability and reduced cost of ownership by the issuer/ operator. Next in order from the top three is vehicle tagging, again lucrative, with high prices for the tags and, more important in this case, the systems.
Cards, but not as we know them
RFID cards are appearing in millions yearly trimmed down as key fobs. RFID passports are a derivative of RFID card technology with the ICAO specifications based on ISO 14443. With legal push, these passports are suddenly a profitable business for many. The insert costs around four dollars because of its sophistication, there are 50 countries involved and many trials of interoperability and other features going on so this is a hive of activity. E-passport demand is rising to a lucrative and sustainable 40 million or so units yearly, with 25 million passports being tagged in 2006. Truly a global market that came from nowhere.
Rapid penetration of EPC
Far from being a story of pallet and case tagging just in the USA, the IDTechEx RFID Knowledgebase shows the Electronic Product Code being used in RFID labels in Colombia, Brazil, the Netherlands and Japan, to take just a few. EPC is used for pallets, cases, airline baggage and item level from retail to aircraft parts and books in bookstores. Penetration is rapid and global and this is a huge success story. There is potential for EPC to be used in at least one third of the future RFID market by value.
Rapid geographical spread
IDTechEx has found RFID in action in 76 countries, up from 49 countries eighteen months ago when there were only 1000 case studies. The big initiatives come from many sectors, some of them neglected by the press. The largest RFID project remains the China ID card but the largest single RFID order that has ever been landed, by value, is now the recent order given to Savi Technology for Military applications at $425 million. Savi Technology has been recently acquired by Lockheed Martin.
China and Korea overtake others
Although Japan, with the third largest number of case studies, was expected to grow in importance, it has just held its percentage share of the cases. Japans trials of RFID in bookshops did not lead to rollouts: the leading bookshop chain in the Netherlands BGN (who will be presenting at the RFID Smart Labels Europe event in London www.smartlabelsEUROPE.com) has independently taken that idea to market. It is China and Korea that have increased their share of case studies by about one percentage point in the last eighteen months to become respectively fifth and eighth in importance. For example, they have been rolling out air baggage tagging, while Europe and Japan have been mired in problems with UHF radio regulations. China and Korea have become strong in city cards, ID cards and tagging vehicles.
Continental Europe, having been surprisingly sleepy in the adoption of RFID given its many world class RFID suppliers, is now waking up. Germany at number four and the Netherlands at number seven are strong in RFID card applications, for example. France at number six is active with RFID in healthcare, the postal service and elsewhere. At the conference RFID Smart Labels Europe in London 19-20 September, www.smartlabelsEurope.com, Ernesto Salvioli will talk on Around Italy in 80 Case Studies, presenting the recent rapid adoption of RFID there.
The US magnet
As for the suppliers, breakthroughs continue to come from unexpected places, such as the lowest power, lowest cost WiFi RFID chip being designed in Australia (now the tenth biggest user in the world by number of cases tagging cows is law there). However, this supplier, G2 Microsystems, has seen fit to set up headquarters in the USA, a trend followed by many Israeli and European RFID suppliers. Anyone checking the location of RFID suppliers will think it is the USA that does all the innovation, which is not quite true. However, the US certainly has the most booming RFID market as evidenced by its share of case studies rocketing from 20 to 34 per cent of the whole in eighteen months despite the number of countries reporting RFID projects nearly doubling.
Active tags become a hot topic
That record breaking military order in the US to Savi Technology was mainly for active tag systems and this technology is now popping up everywhere, contrary to industry forecasts a few years ago. For example, the disruptive new Parasitic WiFi RFID invention (no need to send out your own emissions) has entered over 50 locations in the last year, with US hospitals as eager adopters for both asset and people tagging. Indeed, although the number of cases of people tagging is small relative to other forms of RFID, it is growing unusually fast mainly because of the safety and security it offers in hospitals, theme parks, correctional facilities and elsewhere.
Certain sectors become more important
Applicational sectors taking a bigger proportion of the total RFID pie include healthcare, where most of the new WiFi RFID tags went, and the air industry. In both, the customers are prepared to pay for quality and readability and prices are not in free fall.
Item level jumps the gun
Item level tagging across many applications from aircraft parts to jewellery is an increasingly frequent feature of the RFID Knowledgebase. IDTechEx has recently upped its forecasts of item level tagging based on faster than anticipated progress, where the benefits are greater and the income is more equitably spread through the RFID and consumer goods value chains. Indeed, there is some evidence that consumer goods companies are more interested in item level RFID these days because they see significant benefits for themselves, not just their retail customers.
No one predicted that the largest item level user of RFID in retailing would not employ EPC (Marks & Spencer in the UK, with everything own brand, uses simpler, cheaper RFID) and no one expected the best selling RFID transport/cash replacement cards (from Sony) would not conform to ISO specifications but that is what has happened. A temporary aberration? Time will tell.
For all the talk of Smart Active Labels (SALs), including Time Temperature Recording (TTR) labels, the cases of their use are few and far between as yet. However, about ten companies are now offering such products, so we may hope to see many cases of them in action soon. Near Field UHF is talked about as an alternative to HF for item level tagging but its use is minimal as yet. Printed transistor circuits were promised for this year but they did not arrive on the market. Meanwhile, good old HF tagging using a silicon chip is steadily appearing in more and more applications, industries and countries. However, to confuse us all, a new concept of simple printed conductive stripes has appeared as an RFID solution in several trials in Scandinavia and the USA. Most of the developers of vacuum deposited chipless RFID went belly up and radically new methods of assembling chips into tags have yet to come on stream. No one forecasted that mix of success and failure.
Booming sectors out of the limelight
With profitable and potentially profitable RFID orders being placed in healthcare, the air industry, military, manufacturing, logistics and other industries, the investment community has been galvanised into action and suddenly about ten companies have received investments of $5 to $35 million in this year alone, five times the previous rate. The same is true of acquisitions. In past years, a significant acquisition of an RFID company was announced about twice a year but this year it has been about one a month.
IDTechEx believes that there are about 10,000 cases of RFID in action out there but it depends on definitions. For example, over 500 marathons have involved RFID tagging of participants but IDTechEx is not in the business of listing all of them. One thing is true. The number of new cases is increasing rapidly, with IDTechEx analysing and recording about 60 per month. The number of RFID suppliers is about 1000 with an increasing number of mergers and acquisitions still failing to stop the growth in numbers not what the customers want to see. Learn more online and view real time statistics of RFID case studies see the IDTechEx RFID knowledgebase at www.rfidbase.com.
The 2000th Case Study
The 2000th case study just posted on the RFID knowledgebase covers how a Dallas Hospital is tagging refrigerated drug vials to automate confirmation and provide real time stock information. RFID interrogators are embedded into a fridge which record when tagged vials are brought in. When a vial is removed this is also logged with the supplier, and when the supply of vials reaches a pre-determined level an order for more vials is sent. George Clopp, CTO, Scopra Inc., who provided the software integration, said of the system, Having RFID running in real-time with a network managed solution eliminates data error opportunities. Data is accurate, current, and usable with no need for human intervention. Raghu Das, CEO of IDTechEx, commented, The 2000th case study covers item level tagging in the healthcare sector indicative of those two hot areas of growth in RFID.
All delegates to the IDTechEx event RFID Smart Labels Europe 2006 will receive three months access to the RFID Knowledgebase! For more details see www.smartlabelsEUROPE.com, held in London on 19-20 September.