RFID Spending to Grow 15 Percent Per Year, ABI Research Says
November 11, 2008 Alex Woodie
A study released last week by ABI Research predicts that spending on radio frequency identification (RFID) products will grow at an average rate of 15 percent over the next five years, becoming nearly a $10 billion industry by 2013. However, that number could drop as a result of the global economic crisis.
ABI Research is a company based in New York, London, and Singapore that conducts studies and publishes forecasts of interest to manufacturers in the automotive, consumer electronics, wireless, and broadband industries. Its primary focuses are wireless connectivity, telematics and navigation, and home networking and consumer video technologies.
The current RFID forecast is part of ABI’s ongoing study into RFID spending across a variety of industries. The company found that investment in “traditional” RFID applications–such as access control, document tracking, automatic vehicle identification, and automobile immobilization–dominates the spending on all RFID solutions.
While spending on newer RFID applications–such as supply chain management, ticketing, and contactless payments–trails the total spending on traditional RFID application, the rate of increased spending is much greater for newer RFID applications, according to Michael Liard, research director for ABI.
“In terms of overall market growth, if these ‘traditional’ applications . . . are removed from the equation, the 2008-2013 CAGR [compound annual growth rate] for total RFID systems revenue exceeds 20 percent.”
ABI released a similar RFID spending forecast in May that pegged the total RFID market at $9.7 billion by 2013, a hair less than the $9.8 billion the most current study forecasts. However, the current economic crisis could throw all these predictions to the wind. But it’s too early for ABI to tell.
“We understand that the impact of economic events is often not immediate, however, and we expect to be in a better position to gauge how the economy is impacting RFID adoption and spending at the end of the year,” Liard says. “In our opinion it often takes three to six months for any economic impact to be felt. Many of the vendors and users we have asked about a potential slowdown indicate no real change in RFID projects as yet.”