Frost: RFID Printer/Encoder Applicators Enable Transition from Legacy Data Capture Systems
January 11, 2007 // Published as a news service by IHS
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The radio frequency identification (RFID) printer and encoder market gained significant momentum due to an increase of open-looped pilots and deployments requiring encoding capabilities.
According to Frost & Sullivan, automated validation of encoded tags is also a critical function that is promoting the increased use of RFID printers, and market opportunities are now beginning to extend beyond the North American region.
Analysts said printer/encoder applicators are likely to witness an increased demand in the long term within Asian manufacturing hubs that expect to be impacted by the retail-driven mandates in the American and European markets.
Recent analysis from Frost & Sullivan of the world RFID printing solutions market found revenues totaled $10.7M in 2005, with estimates to reach $209.3M in 2012.
By allowing the combination of human-readable data with RFID capabilities, smart labels are increasingly facilitating the smooth transition from barcode systems toward RFID technology.
Analysts said the growth of smart labels contributed to the increased production of printers and encoders that support in-house label production and changing application needs.
Vertical markets that have been slow adopters of RFID technology represent key opportunities for smart label options, since the migration strategy expects to be least disruptive.
"Besides this, the development of software-based upgrades and wireless printing solutions has also improved the functionality and flexibility of RFID printers, thereby promoting market growth," said Frost & Sullivan research analyst Priyanka Gouthaman.
"Also contributing to the market growth is the ongoing standardization in development and design at the product level, which is likely to drive the market forward across RFID frequency spectrums and legislative requirements."
Analysts said lack of RFID-based technical skills among end-user enterprises is impeding the success of initial tests and pilots. Printing errors can be avoided with the requisite training on optimal printer/encoder settings, inlay read positions, application and environment specific features.
Although larger end-user adopters have made significant investments in separate RFID divisions and technical teams, the lack of RFID skills within smaller enterprises is likely to challenge the vision for pervasive use of RFID.
"A significant challenge for the RFID industry continues to revolve on the lack of end-user awareness about the technology and its potential applications," said Gouthaman. "Most end-user segments lack the understanding that RFID is an enabling technology within complete automated data capture systems and is employed across applications with different technologies, frequency spectrums, data format standards and protocols."
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Given these challenges, analysts said there is an immediate need to increase end-user education to enable the wide-spread adoption of RFID technology. Regulatory organizations, such as CompTIA, are addressing the need for such RFID skills through professional certification programs.
Source: Frost & Sullivan.