RFID Trends: What's Ahead in 2017, Part 2

Leading solution providers speak out on the business and technology issues that will impact adoption in the near future.
By Jennifer Zaino
Jan 15, 2017

Editor's Note: Read part one of our trends report.

Cost Concerns
As the radio frequency identification market continues to grow and the volume of tags, readers and software continues to rise, it is inevitable that economies of scale will drive down overall deployment costs, according to Chris Schaefer, Zebra Technologies' senior director of global market development. "Cost will further go down as volume further increases significantly year over year, be it for labels or other RFID hardware," says Ralf Kodritsch, NXP Semiconductors' segment manager of RFID Solutions.

Meanwhile, Schaefer says, "The value of RFID at current cost levels has been proven in a myriad of use cases. Many of the companies that have already invested in RFID solutions have spoken publicly about the benefits and the return on investment (ROI) they have experienced. RFID has become a competitive edge that benefits those that adopt sooner." While budget issues may never entirely disappear, he says, the risks are greater that delaying deployments will cause businesses to fall behind in their market.

Costs will always matter, says Francisco Melo, Avery Dennison's VP and general manager of global RFID, but "today we are at a cost level where the returns speak louder than the costs." Essential to seeing a payback, he adds, is developing a business case and conducting a pilot to validate the hypothesis.

RFID project talk is becoming more of a value discussion than a cost discussion, say Umesh Cooduvalli, Checkpoint Systems' senior director of product management, and Dean Frew, SML's CTO and SVP of RFID solutions. "When cost becomes an objection in the sales process, it's usually because a strong business case is not yet in place, so we focus on specific business metrics and KPIs [key performance indicators]," Cooduvalli says. "Industries, like retail, will focus on ROI, not on costs per se," Frew adds. "We continue to see volumes of tags, deployment efficiency, RFID reader technology continue to enable more attractive ROIs that are proven inside enterprise deployments around the globe."

"The total cost of solutions should come down as the vertical use cases mature," says Mark Robinton, HID Global's director of business development and strategic innovation for identification technologies. "There will be more turnkey solutions on the software and system sides, which drives the cost down relative to custom software deployments today. On the NFC side, the use of the phone, in many applications, reduces the total cost since it is often already paid for, in contrast with applications where there is the need to acquire and deploy custom or dedicated readers."

"The price differential between passive and various active technologies is decreasing rapidly," says George E. Daddis, Jr., Omni-ID's CEO. "Five to 10 years ago, a passive tag could cost $1.50 and an active tag would cost $40 to $50. Today, the same capabilities can be found in a passive label for 50 cents and $8 to $12 for an active tag (or even less in non-industrial applications). These active technologies, enabled by lower cost radios, long-life batteries and low-cost sensors, are now affordably used in many situations that were previously unattainable because of cost."

While it's highly likely that RFID system prices will slowly get lower due to competitive pressure and other factors, Christian Uhl, Smartrac's CEO and chairman of the board, stresses that cost is not the main point. "Once the IoT's all-encompassing potential is transformed into scalable, RFID-based IoT solutions," he says, "their comprehensible, specific benefits will render the cost of adopting RFID more or less irrelevant."

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