RFID transponders show strong growth; analyst briefing today

Venture Development Corp. (VDC) reports that radio frequency identification (RFID) transponders approached $1 billion of the global market last year. Frost & Sullivan says achieving faster returns on RFID investments is important.


Natick, MA and Palo Alto, CA –Venture Development Corp. (VDC) reports that radio frequency identification (RFID) transponders approached $1 billion of the global market last year. Market growth is predicted at a compounded annual rate of 24% through 2008. Revenue distribution among regional markets was described as “fairly uniform,” with EMEA (Europe, Middle-East, Africa) accounting for just over 35% of total revenues, VDC says. The remainder of the market was almost equally divided between the Americas and Asia-Pacific. This distribution is not expected to continue.

In the next three to five years, the revenues from the Americas and Asia-Pacific should outpace those in the EMEA region. Last year, more than 1.3 billion RFID transponders were shipped; figures are expected to come close to doubling by 2008. Unit shipment distribution differed from revenue splits. Asia-Pacific accounted for an estimated 40% of total shipping. The reason is that the type of transponders used in each region. For instance, Asia-Pacific used lower priced HF and LF transponders; EMEA used more costly smartcards. As source tagging in Asia-Pacific increases, use of lower priced tags will “explode.” VDC predicts Asia-Pacific will register almost 50% of transponder unit shipment by 2008.

Global shipments of RFID transponders (millions of dollars)

2006 $997.4
2007 $1,234.6
2008 $1,535.3

Radio frequency identification transponders use is growing rapidly, according to Venture Development Corp. estimates.

In separate and related news,

Frost & Sullivan

says achieving faster returns on RFID investments is important.antly in terms of technical advancements and standardization of product solutions. While the market continues to be driven by the two largest mandates in the region (Wal-Mart and Department of Defense), the technology is also being considered for track and trace applications within previously unexplored user segments. Recent deployments are based on the existence of strong business cases as opposed to the slap-and-ship approach that was adopted in 2003 and 2004.

"While the rate of RFID adoption has been slower than initial expectations, there is an increasing shift of emphasis from compliance toward objectives such as achieving positive return on investment," notes Frost & Sullivan Industry Analyst Priyanka Gouthaman. "Higher integration with existing IT systems and the redesigning of business processes are expected to be positive trends for sustained market growth of passive RFID tags."

In other RFID news,

IDTechEx is organizing the Active RFID & RTLS Summit

in Dallas, TX, Dec. 5-6, 2007, with confirmed speakers from Ford, BP, Boeing, Telepathx, NIA, and TNT. RTLS stands for real time locating systems.

—Edited by Barb Axelson, contributing editor
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