Retail spending on RFID (radio frequency identification) systems is expected to surpass US$1 billion by 2007, according a study by industry analysts, IDC. The year 2004 may be crucial for RFID as mandates from retail giant Wal-Mart and the US Department of Defense (DoD) bring RFID closer to the real world.
With manufacturers and distributors scrambling to meet the requirements of these mandates, IDC expects RFID spending for the US retail supply chain to grow from 2003’s total of US$91.5 million to almost US$1.3 billion in 2008. Once these initial deployments are complete, however, RFID spending should level off as the industry prepares itself for the next wave of RFID: item-level tagging.
“RFID will be deployed in fits and bursts as manufacturers and retailers move along the learning curve and as tag and reader costs come down over the next several years,” explained Christopher Boone, programme manager of US vertical industry research for IDC. “Although many suppliers and distributors are currently unfamiliar with RFID technology, they will soon need to comply at some level with customer demands for RFID tagging of cases and pallets.”
“Changes to business processes to take advantage of data from RFID tags should determine which enterprise applications will need to be modified, and ultimately how the RFID layer should be designed and deployed,” added Boone.
According to IDC, hardware purchases will dominate RFID spending over the forecast period, reaching some US$875 million in 2007. Most of this spending will occur among manufacturers and their distribution partners, who will bear the burden of purchasing RFID tags as well as the necessary infrastructure and systems integration.
RFID-related services will grow quickly at first, approaching US$270 million in 2007 but growth will slow after 2005. Meanwhile, software spending will accelerate in the second half of the forecast period as the need for RFID middleware expands to an increasing number of companies.
The IDC study, entitled ‘US RFID for the Retail Supply Chain Spending Forecast and Analysis, 2003-2008′ presents IDC’s forecast for spending on RFID for the retail supply chain in the USA from 2002 to 2008. It discusses the current events that are spurring RFID adoption, presents a forecast for RFID hardware, software and services, and offers detailed analysis of the adoption of RFID across the retail supply chain. It concludes with recommendations for both end users and vendors of RFID technology. The study may be purchased directly from IDC.
More Info: http://www.idc.com
Copyright 2003 UsingRFID.com
Reprinted with permission from Using RFID (http://www.usingrfid.com/news)
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