RFID Grows But Cost Is an Obstacle

The cost of radio-frequency identification (RFID) technology remains a stumbling block in the consumer goods market, according to AMR Research. Only 8% of companies surveyed are currently using the new technology but another 23% are piloting it and 12% have plans to implement it this year.

RFID involves the electronic tagging of products, allowing them to be to tracked through manufacture, sale and beyond. It is intended to improve security, stock control and payment systems.

AMR's report, conducted in conjunction with the RFID Journal, is based on a survey of 500 companies. It found that the average budget for implementation of RFID is more than $548,000, and is likely to increase to $771,000 by 2007. The overwhelming majority of respondents cited problems in justifying this level of spending and, for 28% of them, cost was the biggest obstacle to RFID adoption.

A study by grocery think tank IDG last year found similar issues with price: just over half (53%) of those surveyed believed that the cost of RFID outweighs the benefits, with 32% undecided (the full report is at www.mrweb.com/drno/news3178.htm )

The AMR study shows that companies are also put off by the lack of established standards for the technology. Only 29% believe the standards have reached an appropriate level of maturity. It is also clear from the survey that no one vendor has yet established itself in the market. 'RFID is still in its formative years,' said Dennis Gaughan, Research Director at AMR. 'The market will be hotly contested across all technology segments from tags and readers through middleware and enterprise applications.'

AMR Research focuses on enhancing business performance with the aid of technology. The company is online at www.amrresearch.com

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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