Thursday, July 2, 2009 | Dr. Peter Harrop, Chairman, IDTechEx
As forecasted by IDTechEx in "RFID Forecasts, Players, Opportunities 2009-2019," there has been a surge in orders for RFID in 2009. Despite the world's largest RFID project, the $6 billion China National ID card scheme, being completed a year earlier and now being just at replacement level, the global RFID market is rising 5% this year to $5.56 billion. This is in the face of the global financial meltdown which has caused some car production, for example, to plummet by 50%. In many applicational sectors, RFID orders are up 10%. Primarily this is driven by governments doing two things. Increasingly, they make it a legal requirement to fit RFID, recent examples being dogs in New Zealand and four legged livestock other than cows in Europe. Secondly they come up with huge sums of money to buy RFID. This varies from local governments committing to non-stop road tolling and library tagging to national governments increasingly buying military, fish monitoring, national ID card, passport and other forms of RFID.
Nonetheless, suppliers struggling in the wrong sectors often express disbelief at the size of the IDTechEx projections, because we see a quintupling of this market in the next ten years. Here are three rain checks to put their minds at rest. Firstly the sharply increasing IDTechEx RFID Knowledgebase of projects now numbers 3800 in 110 countries, the leading countries being shown below. Secondly, the table below lists just a few of the RFID orders and projects around the world and they come to over ten billion dollars in value. Thirdly, the size and growth of RFID sales by the leading suppliers is consistent with our figures. This really is a major industry that is substantially recession proof and IDTechEx has annual reports detailing activity in most applicational sectors.
RFID by Territory
Most of the action has been in the U.S., where the largest orders continue to be placed, in the UK, China , Germany and Japan. The largest expenditure on RFID is currently in the USA followed by China and Japan. CSC and IBM have landed an order for $570 million to upgrade the UK e-passport applications and enrolment system. Unisys was one of four companies selected by the U.S. Army Program Executive Office-Enterprise Information Systems for a contract for the Radio Frequency Identification III (RFID III) program. This contract has a total ceiling value of $428 million. Currently, RFID tags are attached to approximately 125,000 shipments of U.S. military supplies each week. Transcore landed $63 million for RFID based non-stop tolling in Florida. In addition, the U.S. has seen many multimillion dollar RFID orders placed recently, one example being a $2 million order for Awarepoint to provide a Real Time Locating System for Jackson Health System, continuously tracking 12,000 key assets. For most of these suppliers, the new orders are their largest orders ever.
IDTechEx has had two members of staff touring Japan and China and they report something very different out there. This year, the Chinese are putting RFID where it is not encountered in the West such as in cheques and on fast fishing boats to prevent collisions. However, China is also making the world's largest investment in installing RFID throughout its factories and supply chain in order to underpin the nation's pre-eminence in manufacturing. An order for $8 million of RFID enabled casino chips has been placed by establishments in Macao and the Philippines. Hong Kong is particularly active in RFID. Avery Dennison, Motorola and Print-O-Tape recently landed an order for 70 million baggage tags and associated readers for the airport for example, value being over $15 million. Japan continues to buy over 90% of the world's RFID enabled mobile phones. They can be used to buy access to public transport as well as goods in many retail shops.