R&D key to RFID market growth

The need to optimise business processes is prompting organisations to adopt radiofrequency identification (RFID) solutions, according to Frost & Sullivan.

However, uncertainty about the return on investment in RFID solutions and end users’ unwillingness to move away from the current technology they use are slowing down market development. “As price is the biggest challenge in this market, RFID vendors in ANZ (Australia and New Zealand) need to focus on R&D to develop high-quality products that are cost effective,” said Frost & Sullivan Measurement & Instrumentation Research Analyst Vivek K Reghu. “They will do well to provide customised RFID solutions as opposed to off-the-shelf ones.”

According to the consulting firm’s latest ANZ RFID market report, the market earned revenues of $33 million in 2013 and is expected to reach $72.1 million in 2018 at a compound annual growth rate of 16.9%.

The healthcare sector will account for the highest RFID demand over the next few years. “Currently, RFID solutions are used in the healthcare industry for applications such as patient monitoring, asset tracking and implant tracking,” said Reghu.

The transport and logistics sector has deployed RFID solutions for rail freight transport, truck tracking and vehicle traffic management applications. Such implementations are expected to help increase awareness of RFID technology and, in turn, fuel deployments.

The Frost & Sullivan study covers the end-user segments of transport and logistics, healthcare, retail and livestock.

The implementation of mandatory livestock tracking programs across ANZ is driving the demand for RFID solutions that can help establish a national livestock identification system and improve the traceability of livestock. RFID adoption rates in the livestock industry will strengthen also due to a rising concern about the cost that would have to be incurred in the case of disease outbreaks. The Australian Bureau of Agricultural and Resource Economics and Sciences estimates that foot-and-mouth disease, for instance, could cost the Australian livestock sector around $50 billion over 10 years.

Nevertheless, many players in the livestock industry cannot afford to integrate RFID solutions. The NSW Department of Primary Industries estimates that the implementation of a RFID system could cost livestock owners around 6% of their gross profit. Besides cost, the existence of a robust infrastructure for barcode technology, especially in the retail sector, is discouraging the uptake of RFID.