RFID Application Revenue Mix Is Changing

NEW YORK - September 5, 2007 - According to new market data released by ABI Research, important changes in the revenue mix for RFID applications will be well under way by 2012.

“Established applications such as access control, animal ID, automobile immobilization, and electronic toll collection continue to lead global RFID systems revenues,” says research director Michael Liard . “These four applications account for about 59% of the market today, but within five years their share of the market is expected to decrease to approximately 45%. That revenue will instead be generated by four other rapidly emerging application sectors: security-based solutions, contactless payments, supply chain management, and high-value, high-ROI asset tracking and management applications in a number of vertical markets.”

The research shows that security-centric applications such as ID documents (e-passports, national ID cards) as well as cargo tracking and security are expected to experience strong gains across all regional markets. These markets are being significantly influenced by government policies, legislation, and spending in major national markets such as the US , UK , China , Japan , and South Korea .

Contactless payment solutions are expanding across many regions (showing a nearly 5% revenue market share gain through 2012) as card issuers, financial institutions, and retailers continue pilots, deployments, educational programs, and marketing campaigns.

After a major ramp-up to meet Wal-Mart and US Department of Defense deadlines in 2005, the passive UHF compliance market has slowed somewhat over the last 18 months. However, mid- to long-term growth expectations remain positive. Bolstered by the recent announcement from Metro, the anticipated continued progress of Wal-Mart and the DoD, expected non-compliance-based pallet and case tagging pilots and deployments, and burgeoning item-level opportunities from fashion apparel to consumer electronics to pharmaceuticals, supply chain management is expected to capture an additional 3% revenue market share over the next five years.

Finally, “high-risk, high-value, high-ROI” applications will also become significant revenue generators, particularly asset tracking and management within a number of vertical markets that include manufacturing (spare parts and tool tracking for example), health care (medical devices, equipment, personnel, and patient tracking), transportation/logistics (returnable transport items), and corporate IT environments (e.g., laptops, servers).

ABI Research’s “RFID Market Data” presents the latest information on RFID revenues and unit shipments, segmented by technology, application, and vertical market. It also includes information about RFID software and services revenues sorted by region, vertical market, and primary application.

RFID Market Data is one component of the firm’s RFID Research Service, which includes Research Reports, ABI Insights and analyst inquiry support.

Founded in 1990 and headquartered in New York, ABI Research maintains global operations supporting annual research programs, intelligence services and market reports in broadband and multimedia, RFID & contactless, M2M, wireless connectivity, mobile wireless, transportation, and emerging technologies. For information visit www.abiresearch.com, or call +1.516.624.2500.