ABI: Wi-Fi Encroaching on RFID's Location-Based Services Markets

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ABI: Wi-Fi Encroaching on RFID's Location-Based Services Markets

September 11, 2007 // Published as a news service by IHS

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The large and growing installed base of Wi-Fi equipment means new opportunities for using Wi-Fi in unorthodox ways.

According to ABI Research, one of the most interesting is the growing trend toward using Wi-Fi to provide real-time location services (RTLS) for asset management, security and work-in-progress tracking, which have traditionally been the province of proprietary radio frequency identification (RFID) solutions.

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Analysts said with 2007 revenues estimated at $59 million, this market can best be described as "embryonic." However, recent analysis from ABI Research forecasts the market to reach $839 million in 2012.

"RTLS has historically been associated with RFID, and it's only recently that Wi-Fi has started to play in this arena," said ABI Research vice president and research director Stan Schatt.

"In the past, companies wishing to deploy RTLS had to buy proprietary RFID systems, including very expensive readers. But there is now such a large installed base of Wi-Fi equipment worldwide that Wi-Fi-based RTLS becomes cost-effective for companies that had never considered it before.”

In comparison with RFID, analysts said Wi-Fi-based RTLS does have some disadvantages. It is somewhat less accurate, especially outdoors. It is also less secure, and can require an additional 20% more Wi-Fi access points to a network.

But for a company with a Wi-Fi network already in place, no extra cabling is required for this standards-based, cost-effective measure, as the RTLS functions are handled by specialized software, amounting to the largest portion of the investment.

"This market is opening up to new software developers," said Schatt.

"Wi-Fi equipment manufacturers are new to this kind of application, so they are reselling RTLS software solutions. Vendors would be well-advised to partner with experienced resellers who have been in the vertical market selling proprietary solutions, because it is a sophisticated solution that requires a knowledgeable reseller. I think there will be a good deal of competition for the most experienced resellers."

Schatt said Cisco is clearly the current market leader, but Trapeze and Aruba are also very active in this market.

Source: ABI Research.