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Analysis

New IDTechEx Report shows RFID Market up by 17% from 2011
Simon Holloway By: Simon Holloway, Practice Leader - Process Management & RFID, Bloor Research
Published: 23rd July 2012
Copyright Bloor Research © 2012
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The latest report from RFID research specialists IDTechEx found that, in 2012, the value of the entire RFID market (which covers tags, readers and software/services for both active and passive formats) will be $7.46 billion, up from $6.37 billion in 2011.

The research found that, in some areas, RFID orders are up 10% or more. This is due to growth of passive UHF systems for tagging apparel and many closed loop applications. It is also driven by some governments making it a legal requirement to fit RFID (for example on animals in New Zealand and Europe) or they come up with huge sums of money to buy RFID for projects as diverse as non-stop road tolling and library tagging to national ID cards and passports. Interestingly, IDtechEx found that military spending on RFID is down from previous highs.

IDTechEx found that, in total, 3.98 billion tags will be sold in 2012 versus 2.93 billion in 2011. Most of that growth is from passive UHF RFID labels. IDTechEx commented that, at that frequency, suppliers are still barely profitable so far. For several years capacity has far exceeded demand and those involved in UHF passive RFID tag manufacture are still not profitable over the term of their investment in the topic. From 2007-2009 there has been a series of consolidations, particularly of UHF tag manufacture. In contrast, most of the companies involved in passive HF tag supply are profitable. However, from 2011 onwards there has been strong growth in passive UHF tag demand with Impinj, Avery Dennison and others emerging as leaders. Others such as Smartrac have been acquiring companies creating a large RFID business.

Figure 1: 2012 Revenue by Component Type ($ billion) (Source: IDTechEx, RFID Forecasts, Players and Opportunities 2012-2022)

The report contains some interesting statistics. For instance, at the start of 2012, the cumulative number of RFID tags sold over the last 65 years was 15.1 billion. 20% of that number were sold in 2011.

In many sectors, particularly airline baggage and post, UHF RFID demand has failed to live up to expectations - by a long way. However, in retail, RFID is seeing rapid growth for apparel tagging. IDTechEx found that this application alone demands 1 billion RFID labels in 2012, with 1.35 billion tags forecast for 2013. RFID in the form of tickets used for transit will demand 500 million tags in 2012. IDTechEx find that the RFID market will grow steadily over the next decade, rising four-fold in that period to $26.19 billion in 2022.

So all that hype about RFID wasn't all incorrect. If you, as a vendor, identified the right market to concentrate on or built a complete surrounding business covering many areas then you succeeded.

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