ABI: Strong Application Mix, Value Propositions Drive RFID Pilots, Deployments
March 4, 2008 // Published as a news service by IHS
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The increase in available radio frequency identification (RFID) technology and applications suggests that the market is moving beyond traditional closed-loop application environments, according to ABI Research.
From historical applications (such as security/access control, animal ID, toll collection and automobile immobilization) to asset management and open-loop supply chain applications, analysts said the RFID market is incredibly diverse, while offering strong growth potential.
Many organizations are considering RFID as a means of business process improvement, analysts said, enabling a more visible and effective supply chain, better tracking of corporate assets and more.
"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," said ABI Research director Michael Liard.
"It is important to make this distinction, because some organizations keep quieter about their RFID work to gain a competitive edge."
Analysts said pilots are necessary growing pains of any maturing market, and organizations see the overall benefits of conducting RFID pilots, along with the subsequent implementation. Many pilots are underway in the RFID space across vertical markets and applications.
Immediate high-profile pilots and implementations involve major automotive manufacturers, analysts said, such as Airbus, Boeing, Hong Kong International Airport, iGPS, Marks & Spencer, McCarran Airport, Metro, Tesco, U.S. DOD and Wal-Mart, among others.
"What began as pilots have now progressed into wider implementations," said 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." Analysts said 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 (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," said Liard. "Its use is expanding rapidly with expectations of significantly greater growth and high-volume applications, thereby influencing a broader set of verticals and industries."
Source: ABI Research.