Its basic physics: liquids and metals cause interference and distortion with RF waves.. And if RFID is to be used pervasively throughout the enterprise and value chain, it needs to work in the presence of these materials. Awareness of this problem and the opportunity available to those who can address it aren’t new - companies have developed transponders designed specifically for this purpose and that market continues to grow (see our previous blog on the Read On Metal (ROM) Market). What is new is that the ROM market is now suddenly about to change.
The words “Read-on-Metal transponders” have been synonymous with durable, bulky plastic housed tags leveraging materials designed to reduce RF interference (RFI) … but all that changed a few weeks ago when two leading ROM tag producers – Xerafy and Omni ID – introduced label form factors. The label form factor is preferred in many instances due to footprint/size, flexibility and cost, as well as already being the form factor of choice for many high volume industries (i.e.: CPG, Retail, Pharmaceuticals).
Of equal importance is that these labels will be available on rolls. This means that the label conversion community can leverage their high volume, roll-to-roll production lines to produce these tags - rapidly realizing economies of scale and boosting manufacturing capacity – and that the rolls of converted media can be used in RFID-enabled printers and applicators be used in the field.
The origins of the ROM tag market are rooted in the desire to use a passive Gen2 label. The introduction of the ROM label form factor is a game changing event and we expect it to dramatically impact the Total Available Market (TAM) for ROM transponders, as well as the revenues of those vendors capable of producing them. The current ROM market that is served by ruggedized tags will continue to grow at a respectable rate; however, VDC expects the label will rapidly become the dominant ROM form factor as there are a significant number of applications requiring ROM performance that have either been unable to cost-justify the solution or use the ruggedized form factor (i.e.: IT asset tracking, tool tracking).
What’s the bottom line? The ROM tag market is about to be opened up and the pent up demand is about to be released. Some readers may recall the early years of the RFID industry, when rugged, plastic-housed tags accounted for the vast majority of all transponders until the Gen2 label was introduced. We expect history to repeat itself, this time in the ROM market.