Frost & Sullivan projects radio frequency identification revenue to more than triple from 2008 to 2016 as technology is adopted across verticals.
The market for radio frequency identification (RFID) technology in Southeast Asia and Australia-New Zealand earned revenue of over $80 million in 2008 -- a number that is expected to skyrocket to over $250 million by 2016, according to research firm Frost & Sullivan. RFID is living up to its reputation as a "breakthrough technology," the firm said, as several initiatives are starting across a number of different vertical industries in those regions.
They include the oil and gas, mining, prison, and aviation industries, as well as use in CD/DVDs and casino chips. RFID is being eyed by potential users to boost operations, improve efficiency levels, reduce waste, and increase security. However, the aviation sector in particular, is still feeling the effects of the global economic slowdown, the firm noted, and may not realize benefits in the near term.
Trial implementations of RFID technology are being undertaken with positive initial results, as companies are mindful of the need to stay competitive, especially in the current economic climate, Frost & Sullivan said. But the firm cautioned that one of the main barriers to wide-scale adoption of RFID is the high total cost of ownership.
"Many stakeholders are deterred by the total cost of ownership, as both hardware and system integration cost can be significant -- particularly for larger-scale rollouts," said Frost & Sullivan industry analyst Richard Sebastian, in a statement. "Hence, many potential end users prefer to wait for the costs to reduce before deploying the technology."
The emergence of what Frost & Sullivan refers to as a "knowledge ecosystem," to publish evaluations of RFID trial implementations, is helping to diminish the barriers to deploying new technologies. In the current economic climate, stakeholders must also be willing to take a gamble by investing in new areas that show potential ROI if they want to survive, the firm emphasized.
"Initial results have shown that RFID provides tremendous promise in cost savings, besides significantly improving operational efficiency and enhancing security levels, which is also critical in running any organization today," said Sebastian.
He advised organizations considering RFID implementations to conduct feasibility studies or cost-benefit analyses. Once they determine potential gains, Frost & Sullivan said, they need to aggressively pursue RFID "as a tool to ensure a more competitively run enterprise, as this technology is pivotal for long-term sustainability and profitability."
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