Internet of Things Promises Huge RFID Growth
Author: Enu Waktola, SMARTRAC Vice President for New Markets, and founding Board Member of the RAIN Alliance
RFID adoption is progressing fast, but is still far from achieving its true potential. Here’s an overview of the current situation, and an explanation of what the industry is doing to accelerate market penetration.
It took a long time for RFID to get to where it is today — especially to reach the first billion tags milestone, seven years ago. Today the market is growing dynamically.
With an estimated 3-4 billion RFID-tagged items in 2013 (UHF only), and a 35% to 40% YOY growth rate, there is no question that RFID technology in general has achieved solid penetration throughout commerce worldwide, boosted by dynamic growth from retail apparel implementations.
Over the past decade particularly, the industry has removed technological obstacles, met interoperability requirements and worked on global standardization. It has strengthened educational and promotional efforts around UHF RFID with EPC Gen2 being a prime example, plus the most recent advance with the EPC Gen2V2 standard. It is now true to say that the right UHF RFID standards and technology solutions are in place, supported by a significant number of market players serving all aspects of the ecosystem.
As good as this sounds, and as big as these numbers might appear, RFID adoption is still only scratching the surface — even when looking at retail apparel applications, where RFID tagging is perhaps achieving 1% of the total available market. Looking outside retail apparel, it’s even more obvious that RFID is still in its infancy in terms of implementation, considering the trillions of objects all around us that can be RFID-enabled.
Source: ChainLink Research.
What is the Key Value of RFID?
The power and capacity of RFID is even more evident when looking at emerging opportunities for RFID in the Internet of Things (IoT) landscape. First coined by Kevin Ashton in 1999, the definition of IoT has evolved over the years, and today IoT can perhaps best be described as everyday objects or things that are connected to the Internet, and signifies the inevitable convergence of conventional connected devices and the smart appliances of today and the future.
Source: Beecham Research.
The number and range of IoT applications that can be envisioned with RFID devices are simply tremendous. The inherent value of RFID lies in enabling “things” to report data in real time for faster, quicker, more interactive decisions both at the industrial level and — increasingly — at the consumer level.
Perhaps the best-known concept, sometimes called the “killer app” for IoT, is the interconnected, automated home, where people can interact with everyday devices in their homes. This vision of the future sees appliances such as refrigerators being aware of their ‘state’, and knowing when to order and replenish groceries; electronics such as lighting, music and TV automatically tuning to individual preferences, which can be managed by presence (proximity to RF-enabled device), by time or by sensory input; access solutions, whether logical ones for Wi-Fi user authorization, or hands-free operation of doors and windows... the possibilities are truly endless.
Why is Market Adoption Progressing Slowly?
Having been an active participant in the RFID industry for the past two decades, I would propose two main reasons for the gradual pace of RFID adoption. Firstly, the hype and the normative focus on individual RFID technology components like tags, antennas and readers in isolation, as opposed to holistic solution architectures, continues to hinder real wide-scale implementations.
Secondly, the intensity of industry debates around frequencies and standards have not helped either, as opposed to the demonstration of relevant use cases and solution architectures. Examples of good progress are UHF retail apparel adoption, or NFC pairing implementations.
How Can RFID Achieve its Potential?
Standards and applications are in place; use cases and benefit scenarios have been proven across a wide range of industry sectors. Now, we simply need to connect the dots to make information relevant in real time across the entire ecosystem, in a holistic fashion.
Two obstacles we have to overcome are the present state of point-to-point solutions, and the lack of back-end data. Some of the challenges we face are similar to the challenges faced by Wi-Fi in its early days. Wi-Fi also started from humble beginnings, and to get to where it is today – ubiquitous usage across the globe – required an industry alliance with a focused, unified vision across all ecosystem participants, together with common branding and promotional strategies.
Let it RAIN...
Back in April this year, Google, Impinj, Intel and SMARTRAC, along with the leading AIDC industry association AIM Global, formed the RAIN Alliance. RAIN stands for RAdio-frequency IdentificatioN, and symbolizes the synergy between UHF RFID and the Cloud, as well as the infinite presence of UHF RFID tags and applications envisioned in an Internet of Things landscape.
With a bold vision to connect 28 billion devices and items in 2020 with RFID, the Alliance is poised to speed up dramatically the development and implementation of RFID for an Internet of Things ecosystem. SMARTRAC is proud to be a co-founder of the RAIN Alliance, and we strongly encourage all parties involved in UHF RFID around the world to join the club — it’s time to get connected!