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RFID in 2011: The Vertical Market Story

VDC is in the process of publishing its 2011 RFID vertical market estimates/forecasts for all regions, products, frequencies, verticals and applications.  The following are a few higher-level trends for some of the primary RFID verticals:

  • Significant gains were noted within the retail vertical, particularly for in-store and distribution center applications where most product tagging is currently occurring.  As item level tagging grows, RFID will continue to be pushed down the value chain to the point of manufacture since tagging at the source will enable the use of the same tag throughout the value chain, enabling retailers and their channel partners to further leverage the solution’s value.  As tagging moves from the retail store or the DC to the source of manufacture, shifts in vertical demand are expected.  For example, the warehouse/DC market within the transportation sector will see increased activity as RFID tagging shifts away from the store; however, the manufacturing sector will see a longer-term increase in demand once source-tagging becomes more commonplace.
  • The transportation market – which includes product movement from the point of manufacture through the store floor, as well as travel and logistics – not only continues to account for the majority of reader consumption, but remains a leading adopter of hybrid (i.e.: more than 1 frequency or technology) solutions. Primary applications within transportation include supply chain management, asset tracking, ticketing, baggage handling and security/access control.
  • The pharmaceutical vertical is gaining significant traction in the APAC region, largely due to the Korean mandate to have 50% of pharmaceutical products RFID tagged by the end of 2012. It is expected that more than 320 million tags will be consumed in Korea in 2011 for this application alone.
  • Despite high-profile e-Government programs (i.e.: China ID, U.S. Passports) winding down (becoming limited to new issues and replacements), there is still significant activity occurring within the Government sector. ID programs, document management, government-driven AVI/EVR, supply chain and asset tracking. RTLS/LBS and other security/access control projects continue to exhibit significant activity and continue to deploy infrastructure as these applications scale.
  • Healthcare is also exhibiting strong growth, despite longer technology adoption cycles and budget constraints.  RFID has expanded beyond asset tracking in this market to include more advanced and deeper integration applications such as embedded tags in medical implants and prosthetics, compliance with cleaning/sanitizing protocols, sample and document management, patient and employee tracking, asset and human association, and surgical tool and supply tracking.
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