Global RFID Market to Top $2 Billion in 2005

global Europe Asia-Pacific

Marktetstrat: Global RFID services revenues are expected to touch $350 million in 2005. RFID technology has been growing steadily in the past 3-4 years and is expected to grow rapidly in the 2006-2009 period, before stabilizing and settling on a steady growth path. The year 2004 was marked by excitement related to mandates, entry of new players, re-positioning of some companies as “RFID focused,” new product and service launches, technology advances, standards evolution, partnerships & alliances, mergers & acquisitions, and general market awareness. The worldwide market for RFID was $1.49 billion in 2004. RFID hardware components (Readers, Tags, and ICs) accounted for 72% of the market, followed by Services (19%) and Software (9%).

- Worldwide Reader revenues were $290 million and Tag revenues $645 million in 2004. - Revenues for RFID Hardware (Tags, Readers, ICs) are expected to grow at a CAGR of 28%. Growth in the 2006-2009 period will be high, followed by market stabilization. - Professional Services are expected to reach $850 million by the year 2010. This segment includes service revenues related to business consulting, pilots, full life cycle implementation, hardware engineering, systems integration, and data analysis. - The Access Control applications segment is expected to account for $191 million in revenues in North America in 2005. - In Europe, the Consumer Packaged Goods (CPG) vertical is expected to account for $126 million in RFID-related spending in 2005. - The Asia-Pacific market for RFID software was $12.9 million in 2003, and is expected to grow to $339 million by the end of 2012. Asia-Pacific is behind North America and Europe in implementing supply chain management and execution systems and related software. As the demand for RFID increases, companies in Asia-Pacific (particularly Japan, Korea, China, India, and Australia) are expected to look toward implementing comprehensive SCM and SCE solutions with embedded RFID functionality. The primary beneficiaries of the expected explosion in this market are producers of RFID tags, reader systems, related software, shipping labels, label printers, inks, and antennas. Close behind are leading companies providing software and services for the supply chain function and for the warehouse and transportation industries. Opportunities also abound for transportation and logistics providers – both to improve their own efficiency as well as customer efficiencies. Since RFID does not require line of sight, shipping companies can significantly reduce the time, space, and people needed for inventory handling. The rapid growth rates predicted in 2004 (based on Wal-Mart compliance deadline of January 2005) did not come true. As companies get deeper into RFID planning and analyze potential business process changes, and with the introduction of Gen2 products, the nature and scope of projects will change, with a long-term roadmap. This is a good thing for the RFID ecosystem as a whole, and helps avoid future implosion from poorly planned and implemented solutions. Despite the rapid growth projected, there are restraints/challenges such as data ownership and partner data integration; data security and privacy; implementation costs; integrating data across multiple facilities; managing large volumes of data; need for business process realignment and privacy issues. RFID Products, Applications and Services Worldwide – A Market Strategy Report. Publ 20050524 Cypac European IST prize winner