RFID industry booming, says market research

By Sean Roach

- Last updated on GMT

The radio frequency identification (RFID) industry is booming as
producers and suppliers rush to integrate the technology into their
production lines.

RFID technology is growing at an average annual growth rate of 8 per cent and will exceed €555m this year, according to statistics published by BCC Research.

RFID has long been touted as the future of logistics for all companies by allowing retailers and suppliers to track goods throughout the supply chain.

The price tag to fully integrate RFID into a production system was once deemed too high for many manufacturers. Now those manufacturers are spurring the growth to meet retail demands, says BCC Research.

Producers and manufacturers are feeling the pressure from massive retailers such as Wal-Mart, Target and Metro who have mandated RFID integration. For retailers, the strict control of inventory is a major financial concern making RFID a major cost-saving approach.

Along with retail pressure are new RFID regulations developed by the International Organization for Standardization (ISO) so that manufacturers use compatible devices and RFID technologies.

In the US, the Department of Defense's demand for supply-side RFID has also been a major incentive for the full transition.

In total, retail RFID makes up about 27 per cent of the entire market. Supply chain management makes up 15 per cent of the market when not accounting for warehouse and transportation integration. The rest is divided between RFID applications in logistics, aviation, healthcare and the pharmaceutical industry. These markets are mostly concentrated in the European industry.

RFID middleware, the tool companies use to manage RFID data within their businesses, accounts for 28 per cent of the market, or roughly €157m.

RFID hardware market is projected to reach €398m by the end of 2006. According to BCC Research, the total RFID market will near €857m by 2011.

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