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It's underway
Adoption of radio frequency identification technology is underway in many countries, with some industries already beginning to realize tangible benefits. In health care, R&D and diagnostic labs are tracking samples and chemicals more efficiently; and some pharmaceutical manufacturers, distributors, and retailers have begun employing it to identify counterfeit or expired items. Several nationally known U.S. hospitals are experiencing payback from systems that track and reorder supplies. China has issued more than 1.5 billion RFID-enabled consumer payment cards as part of its "Golden Card" project.
In the supply chain, the technology is being used to decrease cost and increase security in shipping and inventory management. Utilizing RFID and global positioning systems (GPS) in a “cross-docking” application that matches inbound ocean freight containers with outbound truck trailers, a leading third-party logistics provider (3PL) has reported a 20 percent productivity increase in its Port of Long Beach, California, operations (Supply Chain Systems Magazine, March, 2005). In a similar application at the Port of Los Angeles, another 3PL is moving 12,000 containers a week in the space formerly used to move 7,000 containers (U.S. Department of Commerce: Radio Frequency Identification: Opportunities and Challenges in Implementation, April, 2005).
RFID could potentially enable port authorities to quickly and accurately check entire containers for hazardous and illegal goods, instead of simply spot-checking selected containers. And RFID-enabled seals on containers promise substantial improvement in cargo security.
Some airports and airlines have begun trials in baggage handling to reduce losses. In automotive manufacturing, RFID technology is combined with sensors to automate a variety of processes.
This is only the beginning. The vast majority of applications have not yet been conceived.
In this early phase of the RFID market, forecasting spending after widespread adoption, perhaps ten years from now, is difficult. One analyst predicted global market expenditures in 2015 of about $27 billion (“RFID’s Explosive Growth”, Line56, February, 2005). Several research firms have estimated the value of the market in 2005 at about $2 billion, climbing rapidly between 2006 and 2010 (with 2008 revenue totaling $7 billion).
Adoption will spur reduction in the cost of tags, and vice versa. With passive tag prices currently ranging from $.08 to $.30, the so-called “magic tag price” of $.05 may be a year or more away. Sub-cent tags made of printed plastic in lieu of silicon may be yet farther away. Given the eventual cost reductions, market size will be determined by Asia’s adoption of the technology and the development of truly global standards