Review of RFID in 2007

By Raghu Das

In round figures, the value of the RFID market grew strongly to $5 billion in 2007, mainly powered by a peak in deliveries of the Chinese national ID card with about $2 billion of cards and infrastructure being delivered by Chinese suppliers. That made China the biggest RFID market; but if we peel that away, we see the USA as the biggest market. Globally, the RFID business remained government driven with the Healthcare sector showing particularly strong growth in projects and the Financial, Security, Safety sector dwarfing all others in both expenditure and number of projects. It accounted for a massive 48% of market value with Passenger Transport, Automotive coming second with 19% value share. We refer to the value of tags, systems, and support combined. However, let us look beneath the surface, because there are surprises in store.

Where were the most acorns sown?
It is one thing to look at the money spent but that is necessarily historical. On the other hand, the IDTechEx Knowledgebase of RFID projects — the largest in the world by a big margin — reveals where most of the new projects are cropping up. We added 509 projects in 2007 to reach 3096 projects in 101 countries and involving 4231 organizations, with links to 526 company RFID slideshows and audio. Those newly recorded projects represented 20% growth in the size of the database, reflecting the rapid growth of the market way beyond the Chinese ID card. We could have added over 500 more consumer goods companies mandated by retailers to tag pallets and cases but that would be living a lie because most of these are doing little or nothing in the face of the huge financial cost and lack of payback if (when?) they comply. Their usage averaged less than 300,000 tags each and those were purchased at prices nearer to 10 cents than the $5 of passport tags and $50 or more for most active tags. The expenditure on associated infrastructure was also modest, though the potential is huge when new technology reduces costs so RFID suppliers to this sector can put today's eye watering losses behind them. It also calls for certain retailers learn to practice mutuality of benefit with their consumer goods suppliers.

Leading countries by number of projects
Through 2007, the U.S. retained its lead in number of RFID projects but China leapt from number five to number three, overtaking Japan and Germany. This tells us that there are a vast number of new RFID projects in China that will take up the slack now that the glory days of the national ID card are over. They are hugely varied from pigs to mail bags and the prospect of having to tag 150 million pet dogs and 2.4 billion pigs yearly by law. Maybe the 37.5 billion cigarette packets produced every year will be RFID tagged. For a full analysis read the IDTechEx report "RFID in China".

Biggest applicational sector by number of projects
In number of projects, Financial, Security, Safety sector was the biggest at about 19% of the cumulative projects in 2007, in line with our identification of it as the leader in money spent. This bodes well for this sector remaining very important in future, albeit with a different mix of types of large project. In 2007, this pre-eminence in numbers of projects was driven by passports (at least 50 countries now) and RFID financial cards all moving ahead strongly. New adoption of RFID tickets, secure access, RFID enabled phones and other applications also helped this sector. Little wonder that Assa Abloy, specializing in this sector and buying at least one RFID company every year, is probably the biggest company in RFID worldwide. The Chinese ID card scheme may be huge, but it is supplied by a large number of Chinese companies and government system integrators.

After that came the Passenger Transport, Automotive sector with 13% of all projects cumulatively. Those percentages were the same as in 2006. Just one applicational sector took significantly more of the pie by the end of 2007. It was Healthcare. This was predicted in 2006 but it did not happen for the reason given — widespread tagging of drugs for anti-counterfeiting purposes. Many were in favor of the half measure of 2D barcodes for singulation. As a result, frequent automated checking for counterfeits regardless of misorientation and obscuration and with high integrity will be a matter for interminable RFID trials and little more. Even the frequency remains undecided.

Why did Healthcare pull ahead?
The vibrant growth of RFID in the Healthcare sector was mainly due to Real Time Location Systems (RTLS) on staff and assets, particularly those using existing WiFi systems in hospitals. There were also many other RFID technologies applied to Healthcare and they provided excellent paybacks and improvements to safety and security. As a result, Healthcare — and no other applicational sector — saw a one percentage point gain in market share. This only took it to 9.2% of all projects, cumulatively, but it is clearly becoming increasingly important. For this appraisal, we ignore our Leisure category because those projects are usually one off races and not ongoing or leading to something bigger. The Military sector increased its percentage of all projects a little.

Tagging of people increases rapidly
By the end of 2007, the RFID tagging of people had jumped from 8% to 11% of all projects cumulatively. It may not please the privacy advocates but it allowed nurses to radio their precise location when they were being assaulted, mother-baby mismatches and baby theft to be reduced, pedophiles to be controlled, prisoner escapes prevented, and severe diabetics getting correct treatment before they died in the street. The disoriented elderly no longer needed a "jailer" because any dangerous wandering was detected electronically and children could be traced by their parents in theme parks. Should we be ashamed of that?

Active RFID comes to the fore
Those RTLS and Military schemes involved active tags of course. Let us look more closely at active RFID because all is not what it seems to be. Active RFID accounted for about 13% of all RFID expenditure in 2007, but this figure was depressed by the huge Chinese national ID card scheme, which involves passive RFID. Look at the IDTechEx Knowledgebase and you see a more meaningful picture for the future, given that the Chinese ID card scheme has now peaked in deliveries of both cards and infrastructure. A remarkable 32% of projects added in 2007 involved active RFID, taking the cumulative figure to 22%. Little wonder that over 20% of both RFID fund raisings and RFID acquisitions in 2007 involved companies somewhere in the active RFID value chain. The IDTechEx conference Active RFID and RTLS, the only one of its type in the world, also grew strongly in attendance and number of exhibitors in 2007. RTLS is mainly driving this burgeoning active RFID activity. For instance, Ubisense, founded as recently as 2003, already has over 200 clients.

Active RFID will now be powered by two waves. RTLS is the first wave, with 2007 seeing the first major deliveries, including about 100 healthcare facilities adopting RTLS. Ubiquitous Sensor Networks will be the second wave but it has yet to begin in any serious manner. Indeed, some applications will merge both capabilities.

Follow governments
Those seeking to prosper in RFID should, on the evidence of 2007, follow the applications where governments either make it a legal requirement as with some national ID cards and livestock schemes or where government foots the bill. For example, Military and much Healthcare expenditure on RFID is really government money and even the strongly progressing tagging of air baggage is usually backed by huge government grants to airports and airlines, the airports in North America and East Asia being frequently owned by government anyway. In number of projects, airlines and airports held their 3.6% share of all projects through 2007.

The leading frequency
The leading frequency in 2007 remained HF (13.56 MHz) because so many of these projects were huge from 25 million library books and 16 million travel cards in Beijing to the $6 billion Chinese ID card. In fact, HF RFID just to the ISO14443 specification was responsible for about 10 times the expenditure on RFID to any other specification, with large new applications added such as passports and RFID enabled phones. Add supply chain, library, and secure access RFID to the ISO15693 specification at HF and we see huge and expanding use of this frequency. In 2007, many step function improvements in HF RFID parameters were announced — from 50% to a factor of 10 — though mainly not yet commercialized. That promises well for expanding the adoption of HF RFID in future. Indeed, IDTechEx ended the year by announcing a new report analyzing all this under the title "HF RFID — the Great Leap Forward."

The leading shape of tag — déjà vu
Labels are the preferred RFID format in numbers sold — and that by a big margin. However, that increase in market share by active RFID and the increased use of ruggedized passive RFID and passive RFID in the form of wristbands and casino chips has meant that the old plastic molding format is back with a vengeance. In the case of active RFID, that almost invariably means having a lithium button battery inside. The penetration of the new laminar batteries was negligible in 2007. Plastic moldings and wristbands leapt from 4.9% to 10.4% of all recorded RFID projects by year end.

Examples of the resurgence of RFID in plastic moldings include new products from Connexion2 of the UK, SafeTzone, RadarFind, and EmbedTech of the U.S.; and Syris of Taiwan.

Some things did not change
By the end of 2007, most RFID projects were still full rollouts, showing that the industry is more mature than it is often portrayed. Despite the dream of Massachusetts Institute of Technology in 1999 that most RFID tags could contain nothing more than simple read-only numbers, the computer system coping with the rest, this cost effective approach remains impracticable for most applications. At least, that was the opinion of those that signed the checks. At the start of the year, 27% of projects involved read-only tags and at the end of the year, the figure was 26%.

From air baggage tags to tagging items of consumer goods, it seems that the clunky approach of writing to the tag at various times during its life had to be retained by most. That means inherent lack of data synchronization and inherently expensive tags and readers, with read write, password protected chips and so on. Even in large closed systems this is at best questionable given that read only tags perform well at world leader Marks & Spencer in the UK with what will soon be 350 million tags yearly on apparel. Read only tags also perform well in road tolling and many other applications.

Over-design
Given that a basic ISO 14443 tag needs only 3000 transistors, the 70,000 or more designed into UHF and soon HF EPC tags looks more and more like a Pyrrhic victory for the chipmakers and electronics wizards, given the extreme price sensitivity of the envisaged applications. Watch the allegedly lower cost alternative to EPC called the U-code being trialed by seven East Asian governments. After all, the 5-10 trillion barcodes printed every year are read-only.

Some superlatives
Among the largest RFID suppliers, Huahong in China exhibited one of the fastest organic growth rates in 2007. IDTechEx believes that Kovio made the most significant advance in RFID technology in 2007, with the capability of printing thousands of silicon HF transistors to meet specifications designed for silicon chips but at 80% and later 90% cost reduction. Production is planned for the end of 2008. We believe that the biggest impending project for RFID is the UK national ID card which is planned at a cost of $10 billion and slated to escalate to triple that figure.

Who were the strong marketers?
The RFID industry remains far more fragmented than customers and prospective customers would wish. The number of new players greatly exceeds the number being mopped up by Assa Abloy and — newly active in 2007 — Zebra Technologies and a few other acquirers. Curiously, most of the players continue to make little attempt to become famous and many hide what successes they have. By contrast, we continued to see those promoting UHF passive tag systems, shouting even their smallest successes from the rooftops and, in 2007 we could newly add those promoting WiFi RTLS. In general, this is to be commended and those promoting products at HF and other frequencies could learn from this. Indeed, by sheer effort, the UHF lobby has got several specifications written around their products, despite having to quietly shelve earlier promises that all obscured cases in any pallet load could be read with near 100% success, air baggage could be moved through much faster, and UHF could even eliminate use of other frequencies in most RFID applications. Indeed, the more strident WiFi RTLS players have had to go quiet on their original assertion that no new infrastructure is needed. Nevertheless, the passive UHF and WiFi RTLS people publicize even the smallest orders, drive standards (tires, pallets, cases, baggage, etc.) and constantly penetrate even the most obscure applications in far away places. This is a lesson for the whole industry, much of which is engineering led if it is led at all.

An exit poll
Politicians like to do exit polls so let us try one too. The last 50 projects entered into the IDTechEx Knowledgebase in 2007 came from a remarkable 25 countries. Active RFID was used in 40% of these projects and passive UHF and HF were responsible for 28% each. Make of that what you will.

How to learn more
Learn more market insight by hearing from the biggest adopters, most impressive technology developments, and the big picture at the seventh annual RFID Smart Labels USA 2008 event in Boston on February 20-21. Register early for the best savings and over $3,500 of free IDTechEx research, including free access to the IDTechEx RFID Knowledgebase! See www.idtechex.com/usa for details.

IDTECHEX 2008 DATES:

• RFID Smart Labels USA 2008, February 20-21, Boston, USA www.idtechex.com/usa
• Printed Electronics Europe 2008, April 8-9, Dresden, Germany www.idtechex.com/peeurope
• RFID Europe 2008, Sept 30—Oct 1, UK

Raghu Das is the CEO of IDTechEx. For more RFID articles from IDTechEx, please see www.idtechex.com.

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Zebra Technologies Unveils Industry's First UHF RFID Gen 2 Card Printer/Encoder and Zebra-Designed Media

Zebra Technologies announces the launch of its Zebra R3i and R4i UHF RFID card printer/encoders, a new RFID product series designed to save time and costs, while heightening security in a host of auto-identification, access control, and asset tracking applications. The company is also offering genuine Zebra-designed supplies — rugged, flexible UHF RFID-enabled plastic cards for single-sided or dual-sided card printing. The RFID card printers are now available in North America, with global release scheduled for early 2008.

"We are pleased to once again be the first in the industry to develop an innovative solution that delivers business value and meets our customers' auto-identification and tracking needs," states Steve Park, Zebra Vice President and General Manager for RFID. "Designed and engineered jointly by our RFID and card printing business units, the new card printer/encoders offer the longer read ranges and unique identification capabilities of RFID technology that will allow enterprises to add higher levels of security and authentication to their new or existing RFID infrastructures."

epcSolutions, Inc., a leading provider of RFID solutions for supply chain management and asset tracking, was one of the Zebra partners engaged in testing of the new Zebra R3i and R4i RFID printer/encoders. Kevin Kail, President and CEO of epcSolutions notes: "Zebra, in being first-to-market with an RFID card printer/encoder, is the only hardware vendor with a complete suite of products for the 'Internet of Things' where RFID tags can be created for tracking virtually any asset in an organization. This is a transformational product because of its excellent performance, deep functionality, and clean, easy-to-use design — plus it has all of the quality and reliability we have come to expect from Zebra."

As a result of the testing, epcSolutions has already developed four applications for use with the Zebra RFID card printer/encoders. Part of the company's GS1 "Any Asset, One Network" solution, these applications include fixed asset tracking, work-in-process, finished goods/inventory, and access control (people tracking).

The new UHF RFID card printer/encoders are suitable for transponder types: EPC Class 0; EPC Class 1, Gen 1; EPC Class 1, Gen 2; ISO18000-6b and 6-c; and others. Available in two sizes, the card printer/encoders feature 4 MB image memory standard, a 16-character LCD display, and an innovative angled, high-capacity card feeder for faster throughput and fewer rejections. They are designed for use with Zebra-designed form factors, and are also compatible with cards provided by other solution providers. Product options include a magnetic encoder, and built-in Ethernet capability.

The card printer/encoders are ruggedly built, fast and easy to use. The Zebra R4i model can print as many as 130 single-sided, full-color cards or 102 dual-sided, full color cards per hour. They deliver clear, vibrant color printing and print resolution of 300 dpi.

Potential applications and benefits of the new RFID card printer series are wide-ranging and include:

• Tracking and tracing of work-in-process, tools, equipment, and reusable assets (such as drums, totes, and containers) to save costs on repeated purchase of RFID tags/labels.
• Vehicle and fleet tracking to provide fast, accurate information about transport time, dwell time, entry and exit times for easier management of transportation and logistics.
• Tracking of people at entrances and exits in high security premises — such as enterprises, data centers, and government and healthcare facilities — to heighten security.
• Access control and visitor tracking to ensure those peoples' locations are known, and role-based access control badges to ensure authentication for access to secure areas.
• RFID-enabled customer loyalty cards to be used by retailers to increase customer recognition and service.

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Fujitsu Develops World's First 64KByte High-Capacity FRAM RFID Tag for Aviation Applications

Fujitsu Limited announces the development of the world's first 64 kilobyte UHF RFID tag with high-capacity FRAM, which stands for Ferroelectric Random Access Memory. FRAM memory uses ferroelectric film as a capacitor for storing data and features advantages of both ROM and RAM devices — high-speed access, low power consumption, and high endurance for numerous rewrites. The tag has a memory capacity sufficient to store large volumes of aircraft part and maintenance history data, while supporting a number of different radio frequencies to enable traceability worldwide. Fujitsu anticipates that this 64KB UHF-RFID tag will transform global aircraft maintenance operations.

Equipped with 64KB FRAM memory, the world's highest capacity to date, Fujitsu's new RFID tag will enable highly efficient global aircraft maintenance operations by ensuring precise and rapid management of each aircraft part. The tag complies with the EPCglobal Class 1 Gen 2 standard supporting a variety of radio frequencies, which vary by region, and thus provides for global traceability. The tags will deliver high-speed data writing capability and high durability, while also offering state-of-the-art security functions, such as password management for each part of the memory area. The tags can store part identification codes and also product and part maintenance history data.

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Tear Resistant Synthetic Paper for RFID Packaging

Hop Industries Corporation introduces its tear resistant Hop-Syn and DuraLite synthetic paper that performs and prints like fine offset paper, for use in manufacturing anti-theft packaging and RFID tags. The line of Hop-Syn and DuraLite synthetic paper is made of a durable, waterproof plastic that is environmentally friendly and recyclable.

Hop-Syn is a mono-layered synthetic paper made of calcium carbonate and polypropylene resin. This unique construction is manufactured by high speed calendar from a mixture of polypropylene and calcium carbonate filler into a single layered substrate to produce a uniform gauge tolerance, anti-static printing surface, and faster drying surface than conventional plastic. From this mixture, Hop-Syn can be made into different grades that are engineered to offer a different balance of properties and characteristics that make it suitable for a variety of market applications. Hop-Syn's bright white finish will allows the user to print with higher color resolution and superb print definition for durable weather resistant applications. Ranging in gauge thickness from .003 up to .035 gauge, the calendared synthetic paper comes in a wide variety of grades and gauge thicknesses that are suitable for a variety of printing and fabricating processes.

The DuraLite synthetic paper is manufactured from tri-laminated, bi-axially oriented polypropylene through a patented extrusion process. All DuraLite grades are produced with a cavitated BOPP center which makes it highly resistant to tearing and shrinkage for a variety of tag and label applications. Available with both a clay coated and corona treated surface, DuraLite's fine matte surface is easily printable by flexography, offset, letterpress, and screen process printing without needing any pre-treatment.

Hop-Syn G-1 can fold as easy as offset paper, Hop-Syn G-2 can be produced in a higher rigidity and a wider range of thickness, and the Hop-Syn XT can be made with higher tear and better UV resistance properties to meet the most demanding applications. Hop Industries has the capability of designing custom grades of synthetic paper to meet with specific customer requirements.