“Cellular RFID needs a software platform standard to flourish,” says visiongain report

DoCoMo’s FeliCa architecture, a platform on which to develop applications that operate using it, embodies such an approach, reducing the burden and cost for cell phone manufacturers and improving the flexibility for retailers and other vendors.

The study found that 62% of all handsets shipped in 2011 will have tag and/or reader capability, up from less than 1% in 2006. This growth will be driven by falling costs attributed to the integration of NFC chips into mobile devices.

The capability however, does not imply that applications are available. Cell phones can easily power active RFID tags as well as readers, but the lack of applications is slowing the cell phone manufacturer response, which necessitates software platform standards. While there may not be any one killer application, scores of targeted applications can be constructed from these modules to quickly and cost effectively implement solutions.

“The good news is that point solutions fit well in the cellular market,” says visiongain analyst and the report’s lead author Nancee Ruzicka. “Cell phones that can be outfitted for payment, admission, fares and facility access are being tested in many markets.”

“The logical extension of both RFID tag and reader technology is into cell phones, PCs and PDAs, and the industry is beginning to market some of these options. One quarter of the world's population is mobile and it represents the largest opportunity for wide deployment of NFC-based contact-less tag and/or reader applications,” says Ruzicka.

The study also found that RFID reader and tag manufacturers will benefit from the Gen2 standard, which is expected in mid-2006. RFID’s evolution has been marred with several false hypes, but visiongain expects the standardisation of Gen2 to galvanise the market, although there are still questions regarding global interoperability, especially in China, which is part of many supply chains.

“Gen2 is the standard that the world has been waiting for,” says Ruzicka. “Gen2, due to its global acceptance and pending approval in mid-2006, has emerged as the global exception for tags and readers that transmit radio signals. While acceptance is not universal, there is momentum for changing some of the individual regulations that have impeded progress in countries outside of North America,” says Ruzicka.

In 2006, RFID is still scarce at the pallet or box level and nearly non-existent at the item level except for some high-value items, livestock, pets, and a few drugs. While technology deployments seldom happen on schedule, there is an obvious absence from the market on the part of many manufacturers, retailers, shippers, and governments.

“There are some good reasons for this. While most companies believe that RFID is an inevitability, they are not entirely sure of the logistics regarding deployments,” says Ruzicka.

“The industry believes that the next step is widespread deployment for asset tracking and supply chain management, using item-level tagging. While that may be the next logical step, the impact on the access network, storage, and processing will dwarf any requirements the enterprise IT industry has ever contemplated,” adds Ruzicka.

“The companies best suited to an early RFID deployment are SMBs that have not made large investments in integrated supply chain or asset management. Those businesses do not require expensive integration efforts or retrofitting to take advantage of RFID,” concludes Ruzicka.

This report gives a top-level analysis of the RFID market, including pertinent issues such as spectrum, interoperability, scalability, costs and pricing, security and privacy. In addition, it discusses the potential for RFID in the mobile cellular space, looking at integration issues on the network and handsets sides, as well as strategies that can be adopted by mobile operators, handset makers and other players in the mobile value chain.

ENDS

Notes for Editors
If you are interested in a more detailed overview of this report, including the Executive Summary, charts and images, please send an email to sara.peerun@visiongain.com or phone Sara on +44 (0) 20 8767 6711.

About visiongain
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