Internet of Things: Promise and Peril for the RFID Industry

Interest in IoT technologies could bring radio frequency identification much-needed attention, but there are risks for the RFID industry.
By Mark Roberti
Dec 01, 2014

A lot of people are very excited about Internet of Things technologies. Mostly, they are energized by the appeal of consumer devices, such as Google Glass, Apple Watch and Nest thermostats. They believe that connecting consumer and business devices can create additional value—and additional profits.

I agree with them, which is why we recently launched Internet of Things Journal. We want to educate businesspeople about IoT technologies and help them unlock the business benefits that can be achieved.

It is clear to me that radio frequency identification will be the technology most often used to link industrial "things"—tools, jigs, containers, subassemblies, finished products and so forth—to corporate networks so they can be tracked and managed (see The Intranet of Things). So, there are opportunities for RFID companies to leverage the interest in IoT technologies to gain awareness and potentially sales.

But there are inherent risks for RFID providers that position themselves as IoT companies. The IoT is being hyped right now, just as RFID was being hyped in 2003 and 2004. But IoT technologies will follow the Gartner Hype Cycle, just as RFID did. They will be subject to the same technology adoption lifecycle to which RFID has been subject. The hype will be followed by disillusionment, and IoT will eventually fall into the chasm, just as RFID did.

That means that just as the IoT is going into the chasm, RFID could be crossing it. Instead of reaping all the benefits of years of developing and promoting RFID products, companies could wind up missing the rapid adoption phase.

Another potential problem is that when the hype inevitably gives way to reality, RFID could be negatively affected. Since RFID is an IoT technology, it could be dragged back into the chasm along with IoT technologies, just as it is about to cross it on its own. And a third issue is related to resources. There is momentum now toward mass adoption of RFID technology, but if marketing, promotional and product-development dollars become siphoned away from RFID, that could delay mass adoption.

The solution? I would encourage RFID companies to be aware that the hype around IoT technologies will fade, just as it did with RFID and other technologies. Don't say you are an IoT company. Say you are an RFID company, and that RFID enables the Internet of Things. Point out that RFID, like Wi-Fi, is a mature technology that lets you connect things to the Internet. And remember that, first and foremost, RFID is a solution to many business problems on its own.

I believe—in fact, I am certain—that almost all things will eventually be networked, and that's very exciting, because it allows businesses to add value to their products and to better track and manage the things they own and produce. It's obvious that most assets within industrial environments will be connected to intranets via RFID. So in the long term, RFID and IoT technologies will both flourish, with a lot of overlap. But navigating the short-term adoption trends will be tricky. Savvy companies will benefit, while others will get burned.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog, the Editor's Note archive or RFID Connect.

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