Growing, Growing, Grown-up?

Not one year goes by when the RFID market is projected to grow at an even more resounding, oh! last year is so out of fashion rate. This year has been little different with the latest report from ABI giving us another giant glimmer at the end of the tunnel, a sort of pat in the back saying carry on because the rewards are stupendous for those who persevere.

ABI in their latest report released last month (week of the 19th May) assert that sales will grow at a lip-smacking 15% annually between 2007 and 2013 reaching an eventual target of 9.7B. This they say could have been much faster had it not been for slower than expected growth in the more high volume segments like access control, toll management etc.

The Skeptic in us will question - do these projections really hold up? Well, discerning members of the cynics club should take a look at what ABI said to all of us back in 2003 , (http://www.rfidjournal.com/article/view/506/1/1) when they made the assertion that the RFID market will be worth a healthy 3.1B. The good news is that well, mostly the analysts agree that in 2007 the world did a little better than expected by grossing in 4.9 B in RFID sales. The sour news is that the analysts back in 2003 were nowhere close in their assertion that most of this value will be garnered in the operations/supply chain sector. By even the most optimistic estimates the combined market share of the asset management and supply chain sector is at 13%, (http://www.idtechex.com/products/en/articles/00000813.asp) and has decreased from the then 20% instead of growing to 42% as predicted.

Ah! great, the market is much bigger than ABI could have imagine in 2003 you say, well, it is nice if you are the one looking outside in, but for those who are trapped in this RFID bubble it means one thing and only one thing - the market is larger sure, but way more fragmented then we could have imagined in 2003. Not only do we have a plethora of frequencies, a plethora of regulatory environments and standards, a plethora of vendors and SI's but now we have an ever increasing plethora of applications. Say hello to a market with a Pareto distribution. Can't say if the Industry has grown up but it sure has grown fatter.

How fat can fat be? To illustrate this I can't help but make the hackneyed comparison of one wireless technology to another, in this case RFID with the cellphone industry. Recently I heard that ITU is announcing that by the end of the year half the world's population will have been handed a cellphone over which they will merrily be making small talk with their next door neighbour. 3.3 B in the last 20 years is an impressive feat no doubt but when you realize that RFID companies are trying to similarly slap a tag to everyday objects from pill bottles to freight cars, the mind boggles knowing that an average new yorker alone has access to 10B different product choices. So, either the analysts at ABI are right and the growth rate is 15% for the next 30-50 years till we tag everything around us or in reality the growth rate is going to be much larger, say, maybe twice as much... From my own experience working on embedded projects I can tell you one sure thing, that the wackiest RFID application you can dream of is already in production