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Saturday, May 28, 2005

The Changing RFID Landscape

(Via RFID weblog) The RFID industry like other emerging industries shall see more opportunities and dollars not in the hardware side, but,rather,in services. The IDTECHEX view is the emergence of an ecosystem - that shall see hardware companies, system integrators & niche industry players aligning themselves in this fast growing but importantly emerging but rapidly changing ecosystem. The RFID value chain – in left, the chipmakers and material suppliers sell their goods to all comers. The chipmakers generally sell integrated circuits for many purposes and their RFID chips are only a small part of their business. The economics of chip factories and the very similar nature of RFID and non RFID chips dictates this. On the right, the systems providers, integrators and operators and so on specialise in certain applicational sectors such as Savi Technology in military, Trenstar in beer kegs and TransCore in non-stop road tolling. In between, few companies feel their way in this immature business and trying various combinations of hardware, software and other options, neither fully positioned vertically nor horizontally. The big RFID orders have always been in system provision, integration and/or facilities management.

For enterprises and service providers, Barcodes and other disposable artefacts, making the artefact or interrogatory hardware are not a good end point. The big money is in system supply, integration and management. Companies in RFID are adding skills near the end of the value chain- where the big money lies, and companies outside RFID are entering thereabouts too. In the RFID world, nothing is forever, RFID tags with no silicon chip have been the exception – exactly the opposite of the situation with the antitheft tags. That will change, because to achieve the “tag everything” scenario in eg supermarkets calls for tags costing one cent or less and that may be impossible to achieve stably with silicon chip tags – ie with enduring profit for all in the tag supply chain. That means chipless tags such as organic Thin Film Transistor Circuits TFTCs will move to centre stage though the infrastructure will remain largely the same. It means history will be repeated where the large, profitable label market, created for barcodes, largely vanished when barcodes were printed as part of normal graphics on packaging and products. The full paper is available here.

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