Price Cuts Will Speed RFID Adoption

Oyster Bay, NY -- Recent announcements from Alien Technology and Avery Dennison suggest that the prices of RFID tags are finally coming down. Alien has cut the price of its on pitch labels to 12.9 US cents, while Avery Dennison is offering inlays at 7.9 cents. Even that sub-8-cent price is still well above the five cent point that some industry analysts earlier touted as the price needed to ensure a viable RFID industry. But that number has more recently been viewed as too simplistic in any case.

"These new low prices may represent loss-leaders," comments Erik Michielsen, ABI Research's director of RFID and ubiquitous networks. "But when you tie them to the new products and services offered by software companies to help end-users make sense of their RFID data, and to the recent spate of EPC Gen 2 announcements, we may have a three-headed 'benevolent monster' that will promote demand."

ABI Research continuously monitors and evaluates global RFID markets in its "RFID Research Service", which examines RFID product markets in great detail, with segmentation across product types, by region and by price. Further analysis includes qualitative insight and fire-year forecasting based on movement in key RFID vertical markets and their related application markets.

Michielsen, who is currently representing ABI Research at the Frontline Solutions 2005 conference in Chicago, adds, "What we are starting to see is lower cost hardware, tested and proven performance requirements around a new standard, and software that enables non-technology focused end-users to make better decisions and find ways to drive revenue growth and cost refinement. All together, these factors support widespread RFID deployments across a wide range of vertical markets, to a degree we have not seen before."

SOURCE: ABI Research