Analyst Firm Releases Exhaustive RFID Study

Today, the Wireless Data Research Group (WDRG) announced it has found the market for RFID hardware, software and services will increase at a 23 percent CAGR from more than $1 billion in 2003 to $3 billion in 2007. According to the newly available research, the adoption of RFID for inventory and supply chain management applications, coupled with the finalization of a global air interface standard and architectural framework, will add significantly to the already growing base of RFID applications. Among the notable findings of the more than 150-page study:

-- Transponder revenues will grow at an 18 percent CAGR and reach nearly $1 billion by 2006

-- Professional services for engineering, implementation and system integration will grow to $986 million in annual revenues during the next five years

-- Although open standards and advanced production processes will cause steep price declines for RFID tags, worldwide revenues from UHF transponders will increase by 23 percent through 2007

-- The Americas will continue as the leading region for RFID sales, comprising more than 40 percent of the total world market.

Despite the optimistic outlook, there are some outstanding and vital issues that need to be addressed as the market continues to mature, such as:

-- Scalable system operation with heterogeneous vendor environments

-- Steep costs for custom application development and legacy system integration

-- Consumer privacy concerns with regard to retail and consumer packaged goods tracking applications

-- Competing standard development efforts between Auto-ID Inc. and the ISO

"As the RFID industry moves from a silent revolution to a very public evolution, recognition of the importance of automated identification and data capture will reshape the way enterprises manage their supply chain as well as their vendor relationships," reports WDRG's Principal Analyst Ian McPherson. "Trials with open platforms like the EPC network have proven that the technology works. Now the vendors must prove that the information infrastructure scales to support this new interconnected enterprise without breaking the users' budget."

In addition to regional market forecasts for RFID categories, the research includes a thorough analysis of the applications and technologies that promise to drive the market, as well as profiles and commentary on 20 leading vendors and enterprises.

The Wireless Data Research Group is an independent research and consulting firm dedicated to examining the business applications of wireless technology. For more information, visit www.wirelessdataresearch.com.

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