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Frost Perspectives

RFID Technology is a Quintessential Part of the Internet of Things


Aug 11, 2016

rfid technology.jpgIntroduction

Radio-frequency identification (RFID) has made significant strides over the past two decades. Enabling end-to-end visibility, RFID lets customers efficiently track and trace assets and personnel to improve decision making. In the retail industry, for example, customers' shopping experiences are pivotal to establishing a successful brand name. RFID mirrors used inside changing rooms can suggest additional options based on the apparel that customers have chosen and tried on. Also, through the use of readers positioned at various points, retailers can monitor customer traffic patterns in a store, enabling them to better market their products and increase sales.


Enhancing business processes through RFID coupled with greater awareness of the technology is expected to have a considerable impact on its growth. Enhanced benefits in various business processes across supply chains drive RFID reader adoption.

Market Trends

  • The retail, healthcare, and manufacturing verticals offer opportunities for RFID readers. In retail, item-level tagging, source tagging, and omnichannel retailing are expected to drive demand. Major retailers worldwide have deployed RFID in warehouses and stores to manage inventory, prevent shoplifting, and reduce shrinkage. Growing interest in smart manufacturing offers considerable potential for RFID readers. In the healthcare vertical, asset and personnel tracking enables better patient care.
  • Reader modules give manufacturers the flexibility to embed RFID capabilities in their own devices. Vendors across the consumer electronics, automotive, healthcare, and manufacturing verticals use embedded RFID reader modules to develop smarter devices for mobility and easy connectivity. With the growth of the Internet of Things (IoT), embedded reader modules will gain prominence as more manufacturers incorporate them in the design of smart, connected devices.
  • High-frequency readers have dominated the market, and this is expected to continue. However, ultra-high frequency (UHF) readers are expected to gain considerable traction primarily due to cost. The UHF read range is higher than that of other frequencies and has a common global standardization.
  • RFID tag and reader prices have been declining as deployments increase. Vendor competition and the growth of embedded modules are driving the need for effective pricing strategies, and customers are expected to be more receptive to the technology. Embedded reader modules are cheaper and can be easily integrated, ensuring faster time to market for manufacturers' devices.
  • RFID deployment has been slower in the Asia-Pacific region than in the established economies of North America and Europe. However, economic growth; the rising middle class; an increasing focus on manufacturing; the significant presence of global automotive, aerospace, manufacturing, healthcare, retail, and other companies; and more governmental support are expected to drive RFID growth in the region.

Emphasis on UHF and Industry Challenges

RAIN RFID, an industry alliance formed by the Association for Automatic Identification and Mobility, Smartrac, Impinj, Google, and Intel, was launched to promote the growth of UHF technology. As more companies began supporting and promoting UHF RFID, initiatives and mandates from companies including Walmart eventually filtered across industries. Interest in niche applications is increasing, such as using RFID in sports to improve customer experience and monitor player fitness and conditioning.

Despite a positive outlook for the RFID readers market, several challenges exist. The growth of allied technologies such as Bluetooth low energy (BLE) and Wi-Fi-enabled connected devices will restrain demand for fixed and handheld RFID readers. In the healthcare vertical, several market participants are providing indoor location with BLE technology, and caregivers are exploring other BLE opportunities. As the IoT concept grows and the use of Wi-Fi and BLE becomes more popular, smartphones, tablets, and other Wi-Fi- and BLE-enabled devices such as wearables would be able to act as readers and give information about the location of assets and personnel.

Conclusion

With the IoT gaining prominence, digitization of processes across verticals continues to be the biggest driver for RFID readers globally. Retail is the largest contributor to RFID growth, with applications emerging in manufacturing and healthcare. Demand for one-stop solutions is increasing. Companies are expanding their product portfolios as customer interest in procuring multiple solutions from a single vendor increases.



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