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All RFID transponders, regardless of frequency or form factor, are expected to undergo steady and rapid growth over the next five years, according to recent research from VDC.

The company reports that the majority of RFID revenues in 2007 continued to stem from leading and more mature applications such as security/access control, toll collection, and asset tracking within vertical markets such as transportation, automotive, and government.

Look to mature markets
Although emerging applications like ticketing, contactless payment, and item-level tracking (ILT) in vertical markets such as pharmaceuticals, CPG, and health care are anticipated to experience significant growth over the next five years (especially when item-level tracking takes hold), the more mature markets and applications will continue to account for the majority of revenues.

The global market for RFID transponders exceeded US$1.2 billion in 2007 and is expected to grow at a compounded annual rate (CAGR) in excess of 25% through to 2012. Unit shipments in 2007 exceeded 1.6 billion and are expected to exceed 6.0 billion by 2012.

Adoption rate increasing
"Adoption of RFID continues to gain various levels of momentum across all regions and verticals," said Louis Bianchin, Senior RFID Analyst for VDC. "Even the EPC UHF market, which has historically under-performed most expectations, may be poised for growth."

A diversity of market influences is driving this growth, including:

• Increased pilot conversions (to commercial deployments) and expanded roll outs;
   
• High-levels of innovation and new/upgraded product introductions;
   
• More realistic end-user expectations and an improved comprehension of the technology's value proposition;
   
• Improved standards and mandates (some with penalties);
   
• Deeper penetration into leading and more established RFID markets (i.e., government, transportation);
   
• Increased integration with other technologies (i.e., bar code), as well as the perception that RFID is not a replacement technology, but a complementary one;
   
• Continued price erosion and performance improvement;
   
• More knowledgeable and experienced systems designers and integrators.

More Info:

http://www.vdc-corp.com

Source: Venture Development Corporation (VDC)