If market indicators prove out, 2006 could be the breakout year for RFID—at least thats the goal for the folks at Symbol Technologies Inc., which manufacturers RFID-enabled tags, readers and antennas.
But there are no guarantees.
Symbol has a number of new initiatives in the works, including new form factors for readers (think fork lifts and other distribution center applications), handheld readers that incorporate EPCglobal Inc.s Generation 2 standard and multiplex reader capabilities through a recent partnership with Vue Technology.
At the same time, pilot programs underway will lead to new vertically-oriented supply chain tracking technology, while RFID mandates in the private and public sector could lead, potentially, to major implementations of RFID technology, according to Phil Lazo, general manager of RFID Infrastructure with Symbol.
“Were pretty excited about the possibilities in 2006,” said Lazo, in Holtsville, New York. “From a market perspective, there are continuing [RFID] roll outs.”
Lazo points to several pilot programs in the works at Symbol that are leading to new technology and potential implementations. For example, the company is participating in a worldwide interoperability test for baggage tracking in the airline industry that tracks baggage across airports around the world. Another program tracks parcel and post globally.
“There is interesting technology emerging tracking parcel and post,” said Lazo. “It is the same UHF EPC technology, we just work with partners to create a specific solution around that [vertical market], tracking a number of items in the postal [system], providing customers with greater visibility of their product as it moves across the supply chain.”
At the same time, mandates from the likes of the Department of Defense and Wal-Mart Stores Inc. that require certain suppliers to RFID-enable goods in 2006 ensure adoption at some level.
However, such measures do not ensure wide-scale RFID adoptability in the coming year, according to Lazo.
“We hope pilots will turn into full blown production in 06,” said Lazo. “Other customers are coming online … some customers in retail will significantly expand out the number of stores implementing this technology. Is it a hockey-stick event in 2006? No, but it will be incremental and significant to sustain us in 2006.”
Despite challenges, IT research firm Gartner Inc. expects RFID adoption to continue to gather momentum in the coming years.
In a report released earlier this month, Gartner predicted RFID spending will accelerate in 2006 and 2007 as “true benefits” are documented.
Worldwide RFID spending is expected to total $504 million this year, up 39 percent from 2004. By the end of 2006, new license revenue is expected to total $751 million. By 2010, Gartner predicts worldwide RFID spending will surpass $3 billion.
“Businesses are beginning to discover business value in places where they cannot use bar coding, which will be the force that moves RFID forward,” said Gartner analyst Jeff Woods, in the study.
“As the innovators trials become public, broader deployments across emerging sectors, not just consumer goods and retail, will become evident in 2006 and 2007.”
The High Price of
One problem plaguing RFID implementations has been the relative high price of tagging items, because of tag prices and availability.
Lazo thinks that will change in the coming year, with tag prices generally coming down, and volumes coming up. To this end, Symbol has increased its tag production capacity for the coming year to the tune of 400 million tags.
At the same time, the company is building out functionality with Vue Technology that will enable users to essentially network readers across a physical space—a move that will bring the cost of implementing an RFID infrastructure down.
Through a partnership announced Dec. 14, Symbol and Vue will jointly develop integrated item-level RFID software for retailers and manufactures.
“One of our readers today drives four antennas,” said Lazo. “There are hundreds of shelves in a retail store, so [installing a lot of readers] is cost prohibitive. View provides a way to connect more than four antennas that you can install on the shelf, and have it be driven by more than one reader.”
Under the terms of the agreement, Vue will combine its RF Networking technology and EPC (Electronic Product Code) management software with Symbols RFID fixed and handheld readers, tags and peripheral devices.
The resulting platform is expected to expand the reach of RFID from traditional pallet and case-level distribution applications to winnowed-down store shelf applications that focus more on on-shelf availability around product categories, according to a Vue press release announcing the deal.
At the same time, Symbol is taking the knowledge it has gained to date around reader technology, and applying that to “every conceivable reader point,” to develop new solutions, according to Lazo.
“What do you do about developing a solution around a forklift,” said Lazo. “[You develop] a solution that goes beyond individual components. At the dock door, we looked at that and said, what would rugged-ize that solution and make it more easy to deploy? We created the DC600 [Portal System]. Were doing the same around forklift and other reader embodiments.”
The forklift application is expected in the first half of next year. Symbol is also working on getting out Gen 2 compliant readers, and will offer a handheld version in the first quarter of next year.
Additional feature and performance improvements around Gen 2 tags are also planned. One example is duel dipole technology that will be incorporated into Symbols tags that will enable tags to cover more orientation area and provide better read rates, according to Lazo.
There are, however, still some challenges around RFID adoption to overcome.
“Return on investment and cost, as it relates to ROI is something we continue to work on,” said Lazo. “Also, standards—so there is a single worldwide standard for tags—are important.”
There is also the question of a basic business case for RFID to overcome. Asked if there were any signs of full production RFID implementations in the works, Lazo answered frankly: “Not really.”