UHF RFID Reader Prices Must (and Will) Fall

ABI: US RFID readers using the UHF band are among the most expensive purchases for companies complying with supply chain mandates from Wal-Mart and others. These companies consistently cite UHF reader costs as verging on the prohibitive. Why, and what will bring those prices down? The typical UHF reader today costs US$2500-3000: a hefty pricetag for any company planning a large-scale deployment. Unlike RFID label makers, reader vendors are tight-lipped about the cost breakdown for a reader's components and production costs. Lack of IC integration and low production volumes appear to be the main culprits in driving up prices. UHF readers are mainly used for supply chain management deployments. Today manufacturers buy off-the-shelf components and assemble circuit boards themselves. That's an expensive proposition especially as these readers can be very complex. And that's why UHF reader prices are expected to fall dramatically in the medium-term. Reader designers believe that when integrated chipsets become available, prices will fall. That is likely to occur late in 2006 or early in 2007, as semiconductor vendors become confident enough to make the large required investments in money and manufacturing plant. When more RFID activities grow from small-scale trials to full-scale deployment, greater reader production volumes should have the same effect that they do everywhere, of driving prices down. Considering the number of companies being affected by these mandates, volumes will rise dramatically. At this pointeverybody agrees: ‘volume is coming' but nobody knows when, so they don't want to move prematurely. Will first-movers have an advantage? Yes, but as prices fall, it may be short-lived. The Market for RFID Readers Publ 20051207 RFID? Wikipedia