First the facts. Item level tagging is a term that is not officially defined. Most people in the RFID industry take it to mean the tagging of small inanimate things in their millions or more. Those small things are the smallest unit of that product that is ever likely to be RFID tagged. Conveyances, vehicles and animals are not unusually included but that does not leave consumer goods supply chains and retail and nothing else. For example, tagging of sheets of paper in archives, books in libraries and apparel in laundries would be included. Indeed, about 150 million of these have already been tagged.

 

What is indisputable is that item level tagging will involve the largest numbers of RFID tags of any market. The potential is in trillions of units yearly - maybe as much as ten trillion. Accordingly, this is the biggest opportunity in monetary value for tag makers in due course, even though prices must drop to record low values to achieve this. Delays in making it happen can theoretically come from legal considerations such as new privacy laws, insufficient production capacity, tag systems not working satisfactorily and other factors such as the purchasers not being convinced of the business case or simply not having the money available to invest.

 

At IDTechEx we believe that tag price and the technical performance of the system are the key impediments. Production constraints will occur from time to time but many companies are capable of financing and installing capacity of at least one billion tags yearly.

 

Alien Technology, with the most ambitious production expansion program declared to date, says, "There is no capacity problem in this industry". Excluding mismatches between orders and supply from time and occasional chip famines (before chipless versions become popular), we would agree. You don't have giants like Texas Instruments, Dai Nippon Printing, Avery Dennison, Symbol Technologies, Samsung and many others piling in to make RFID tags and then have an ongoing shortage.

 

There is intense interest in which frequency will win. To examine this we now oversimplify the arguments in order to see the wood for the trees. In the longer term that could involve many frequencies to choose from because, to take just two examples, very low cost tags such as electromagnetic chipless tags at a few kilohertz may be made adequate in performance or Surface Acoustic Wave tags at 2.45 GHz may come our cheapest and best. Both are far simpler to make than silicon chips.

 

For more, read this months Smart Labels Analyst Journal.