Revenue from radio frequency identification (RFID) technology should reach $1.2 billion this year worldwide, up nearly 31% from $917.3 million in 2007, according to the forecast released Monday from research firm Gartner. In four years sales should reach $3.5 billion.
Forced adoption by mandates from the U.S. Department of Defense (DoD) and Wal-Mart Stores initially drove the market, but key trends in asset management continue to lift and move it along. "The market for RFID technologies has begun to transition from being compliance-oriented to being revenue-generating and innovative," says Chad Eschinger, Gartner analyst, in a statement. "Early adopters faced tight profit margins and pressed technology providers for lower hardware costs. Fortunately for the market, this trend has waned and innovation rather than cost is becoming a key driver for adoption."
Gartner warns companies to prepare for further consolidation. RFID adoption has been impacted by companies not having complete plug-and-play systems from one, or even two providers, but mergers and acquisitions could change that. The research firm estimates 2008 will bring rapid consolidation within both the hardware and the software markets.
As for 2007, the leading industries for global RFID revenue were discrete manufacturing, 21%, national and international government, 20%, and transportation, 20%. Retail trade ranked fourth with 14% of the market.
