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RFID market to grow 10 fold by 2016, firm says

Posted: 30 Jan 2006 ?? ?Print Version ?Bookmark and Share

Keywords:Dylan McGrath? IDTechEx? RFID?

Market research analyst IDTechEx said last week (Jan. 26) it expects the size of the RFID market, including systems and services, to grow from roughly $2.7 billion in 2006 to $12.3 billion in 2010. By 2016, it expects the market to be worth $26.2 billion.

IDTechEx said it expects 1.3 billion RFID tags to be sold in 2006, with the majority going to a range of diverse markets from baggage and passports to contactless payment cards and drugs. The firm said it expects about 500 million RFID tags to be used for pallet- and case-level tagging in 2006.

To put the growth of RFID in perspective, according to IDTechEx, cumulative all time sales of RFID tags entering 2006 had been 2.4 billion, a quarter of which were sold in 2005. IDTechEx expects the market to be worth $2.7 billion in 2006, growing to $12.3 billion in 2010. It expects the number of tags delivered in 2016 to be more than 450 times the number delivered in 2006.

There has been no shortage of predictions about tremendous growth for RFID recently. Recently, In-Stat said it expects the number of RFID tags produced worldwide to increase more than 25 fold between 2005 and 2010, reaching 33 billion.

In the short term, IDTechEx said, large "closed loop" markets requiring high-value RFID will remain very profitable and companies will seek to position themselves as the leader in hardware and integration in different vertical market segments. Challenges with tag yield versus cost, frequency acceptance, specification creep and required performance levels are some of the key issues that are being resolved to grow the RFID market, IDTechEx said.

IDTechEx said many new RFID markets are being created, including real time location systems that employ active RFID, which IDTechEx estimates will alone be worth more than $6 billion in 2016.

Growth in passive RFID will be driven by the tagging of high volume items such as consumer goods, drugs and postal packages, IDTechEx, at the request of retailers, military forces and postal authorities and for legal reasons. In these cases, the primary benefits sought will be broader and include cost, increased sales, improved safety, reduced crime and improved customer service, according to IDTechEx.

IDTechEx said many companies are increasingly focusing on profitable value-added niche RFID markets, many of which will ultimately be "billion dollar, billion tag" opportunities, such as the tagging of books, drugs, tires, ticketing, secure documents, livestock, baggage and others.

IDTechEx, which specializes in research on RFID, smart packaging and printed electronics, is marketing a 190 page report titled "RFID Forecasts, Players & Opportunities 2006-2016."

- Dylan McGrath
EE Times

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