Gartner: Global RFID market to top $1.2B this year

Businesses are moving out of the pilot stage and focusing on asset management, compliance

Gartner Inc. is predicting that worldwide revenue for radio frequency identification technology will eclipse $1.2 billion this year, marking an almost 31% increase over last year.

Global RFID revenue in 2007 hit $917.3 million, and it will reach $3.5 billion by 2012, Gartner analysts predicted in the report released yesterday.

"The market for RFID technologies has begun to transition from being compliance-oriented to being revenue-generating and innovative," said Gartner analyst Chad Eschinger in a statement. "Early adopters faced tight profit margins and pressed technology providers for lower hardware costs. Fortunately for the market, this trend has waned and innovation rather than cost is becoming a key driver for adoption."

Forced adoption to comply with new regulations was a key driver in pushing the RFID market ahead, according to Gartner's latest report. Interest in asset management projects -- particularly in-store inventory management -- is driving the growth today.

Now, according to Gartner, the RFID market is heading into its second wave of adoption. Businesses are moving away from their initial pilot programs and are entering what Gartner is calling the "exploration phase."

"While the interest for RFID technologies is high, today's buyer is more discriminating than in the past and cautious of overhyped technologies," said Eschinger. "They will be looking for greater functionality and return on investment."

Earlier this month, Ford Motor Co. announced that it is diving head-long into RFID, embedding the technology in its pickup trucks and vans. It's being set up to tag and track tools, construction equipment and materials so that a vehicle's owner can use an in-dash computer interface to make sure everything he needs is actually in the vehicle.

Copyright © 2008 IDG Communications, Inc.

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