RFID 2006 Year in Review - Retail Mandates Disappoint

Filed in archive Market Size on December 28, 2006

For my next several posts I plan to focus on reviewing the year 2006, and what it meant for the RFID market, so that we can set a baseline for where we are as 2007 rings in.

In this first post in the series I will focus on the excellent year-in-review article from IDTechEx.

IDTechEx's articles and analyses are my hands-down favorites because they give the most comprehensive, big picture view of any source available, I think, for two reasons. First, their analyses take a world view -- not just a U.S. or other country's view of the RFID market. Second, they look at the RFID market in its entirety, not just RFID in the supply chain or in retail or in any particular market segment.

Consequently, you get a truer picture of what's going on, not just a slice of what is occurring. Also, you get a better sense for the importance of RFID in commerce and government today.

Raghu Das, the CEO of IDTechEx, writes that 2006 was a year of extremes. On the one hand, of the retail mandates at the case/pallet level, the big news was one of disappointment. As Raghu puts it, "the volumes never came." The interesting part is the winners and losers in the retail mandate scenario. Winners: The retailers, which added $100 Million to their margins. Losers: The consumer goods companies, which lost $100 Million, and the RFID technology suppliers, which lost another $100 Million, according to IDTechEx's estimates.

Yet, at the same time, other sectors are booming.

Transportation systems, including luggage tagging in the airline industry, are taking off. Ubiquitous sensor networks and livestock tagging are other promising segments.

Contactless cards are a successful market, and will pass $3 billion in 2008.

Contactless ticket sales are taking off and will rise from 100 million in 2007 to 450 million in 2010.

Read the entire article: RFID in 2006: A story of extremes.