ABI Says RFID Spending Still on Pace for Healthy Growth

Published: March 9, 2010

by Alex Woodie

Despite years of lower-than-anticipated spending on radio frequency identification (RFID) technology, ABI Research is once again predicting strong double-digit growth in sales of RFID equipment and software over the next five years.

This week, the market research firm announced that it expects the overall RFID market to grow to $7.46 billion by 2014, representing a 14 percent compound annual growth rate (CAGR) over the next five years. If the market for automobile immobilization is factored into the equation, the total amount of spending on RFID is expected to hit $8.25 billion by then.

This year, the market for RFID is expected to hit nearly $4.5 billion, or $5.35 with the cars factored in, ABI says.

If these rosy predictions on RFID growth sound familiar, then you have been paying attention. In November 2008, ABI announced the results of a study that showed RFID spending would grow 15 percent annually, on a CAGR basis. By 2013, ABI said, the total global market for RFID would hit $10 billion.

Obviously, something changed if we're still on pace for 14 or 15 percent annual growth in RFID spending, but the end result after five years will only be $7.5 billion (or $8.25 billion if you factor in the cars), instead of the $10 billion ABI was talking about in November 2008.

What changed is that the predictions on RFID spending did not match the reality of RFID spending. However, hope springs anew in the IT business, and with that in mind, we're right on course for a strong 14 percent annual growth in RFID, so hold onto your seat cushions.

RFID has not lived up to the hype in the supply chain world. In fact, it hasn't even been close. Many i/OS shops in the distribution space are still smarting from the forced march to RFID adoption required by their retail overlords, including Wal-Mart, which eventually relented on its RFID mandate (but which is now looking to curry the favor of environmentalist by driving "green" technology mandates through its massive supply chain).

As a result of the massive failure that has been supply chain RFID, folks like ABI are touting the other uses of RFID, things like automobile immobilization, animal identification, asset management, baggage handling, cargo tracking, and ticketing.

Maybe, one day, the economics and technology will align properly to allow another go at RFID-enabling the North American consumer goods supply chain. In the meantime, the miracle technology will be used to drive up costs at the vet and to confirm that, yes, your lost bag has been detected on the tarmac at East Hawkesbury, Ontario.

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