RFID in Japan is a tale of two extremes. On one side the use of contactless (RFID) cards is growing exponentially. Tens of thousands of stores in Tokyo have RFID readers installed at the point of sale which accept your RFID card or RFID enabled cell phone. Toppan Forms, one of the biggest producers of these cards, told us another factory is coming online to double their card capacity so they can keep up with demand. This year, 47 to 50 million cellphones will be sold in Japan which are RFID enabled, allowing you to use them for retailing but also the RFID transport system in Tokyo.
On the other hand, use of RFID labels is pitiful. The limited UHF bandwidth and dense reader problems are still major issues to adoption. When we visited first in July the Government had put forward new plans to charge users using the UHF RFID frequency spectrum. In September when we returned to Japan we learnt that this has now been quashed thanks to the efforts of EPCglobal in Japan, but it had been another delaying factor. Other challenges still persist - for example, the government has made it mandatory to all those installing UHF readers that stickers must be placed near readers to warn all those with pace makers to stay several meters away. Will retailers adopt UHF only to put these stickers on their shelves and scare customers? IDTechEx don't think so. This is not the case at LF, HF and 2.45GHz, which are widely used in Japan.
However, on the plus side, the Government has injected over 10 Billion Yen in the last three years (about $86 Million) for RFID projects and in some cases there are signs that the companies will begin to take over and continue the project, but progress is still slow. In the mean time, many are using their RFID manufacturing capacity to serve the rapidly growing contactless card market. Like elsewhere in the World, most uses of RFID labels are for closed loop systems.
Mighty Card's President, Mr Koji Kabomoto, told IDTechEx about its customer Yodobashi Camera Company which, he says, is the biggest RFID label user in Japan (and is a roll out, not pilot, and expanding). As we reported last year, Yodobashi announced its intention for all incoming supplies to its Distribution Centre in Kawasaki to be tagged using UHF EPC tags. The Yodobashi RFID system has three objectives. The first is to reduce the manpower requirements and improve the accuracy of shipment inspection. The second is to establish new shipment processes at suppliers. The third is to automate and increase the autonomy of business processes, including inventory management and supplier management.
About 30 suppliers have agreed to start tagging their shipments to Yodobashi. Some 100 readers will be installed at the Kawasaki DC. The tags are operating at 952-954MHz, which is the band now opened for UHF by the Japanese Government. Many players in Japan are watching this project to see if the technical performance is as expected and whether Yodobashi realizes its commercial objectives. IDTechEx will keep you updated with the latest developments on this.
Mitchell Shinozaki of Toppan Forms described the explosive market for contactless cards in Japan. Over 200 million contactless cards have cumulatively been used here, with strong growth in cards for transport and retail. NTTDoCoMo and others will ship approximately 47 to 50 million RFID enabled cellphones in 2007, which can piggy-back off existing RFID infrastructure in stores and transportation systems. Compared to a credit card, paying with your cellphone for small purchases is more convenient. Sony is the biggest supplier of RF chips for these cards and cellphones. When IDTechEx visited Japan, most stores and restaurants in the city would accept the RFID enabled cellphone or card as payment - over 50,000 readers have been installed at point of sale.
To read detailed profiles about major Japanese company activities in RFID, read the full article in the IDTechEx journal RFID Analyst www.idtechex.com/analyst
Learn more at the annual IDTechEx RFID Smart Labels USA 2008 event in Boston, USA on Feb 20-21, where such developments will be covered by Japanese companies themselves. See www.IDTechEx.com/USA