The value of the RFID market in 2009 will rise to $5.56 billion, up from $5.25 billion in 2008, according to a new report by IDTechEx, a research and consulting firm.
Although many commercial RFID initiatives have been stalled because of the absence of a clear return on investment, the overall market for RFID products and services continues to grow because of government-led RFID schemes such as those for transportation, national ID (contactless cards and passports), and animal tagging. The RFID market comprises tags, readers and software/services for RFID cards, labels, and all other form factors.
Overall, 2.35 billion tags will be sold in 2009 compared with 1.97 billion in 2008; 1.74 billion in 2006, and 1.02 billion in 2005. According to IDTechEx, $2.23 billion was spent on tags alone in 2008, at an average price of $1.13 per tag. With the launch of printed RFID later this year for transit ticketing and other applications, and the increased use of RFID labels rather than cards, the average price of a tag will fall to 22 cents in 2014.
A few major retailers, such as Marks & Spencer and American Apparel, will continue to roll out their RFID initiatives this year. Some 200 million RFID labels will be used for apparel globally in 2009. RFID tagging of animals (such as pigs, cattle and sheep) will also grow because of legal mandates in many countries, including China and Australia. Some 105 million tags will be used for this sector in 2009.
350 million RFID tickets will be sold in 2009 for transit schemes in cities around the world. Only 225 million passive UHF tags will be used for this application in 2009, far fewer than the 35 billion tags that one consumer goods company alone predicted in 2003 that it would be buying by 2009, the report said. The main factors behind the disappointing numbers include technical failures (poor read rates with high moisture content and metal products), a lack of RFID infrastructure, and the inability of retailers and their supply chain partners to work together to meet their common needs by using RFID.