RFID Analyst

On privacy issues, the Auto ID Centers have retained PR experts Fleishmann-Hillard and an impressively staffed Independent Policy Advisory Council. They have now played an excellent new card against a small but vocal minority. These people allege that our privacy will be outrageously invaded by widespread tagging of things we possess, whether on our person or not. They allege that it will be possible for anyone to know what you have in your home without entering it and you may be traced from the RFID tag in your shirt. They argue that RFID should be banned. The new approach by the Auto ID Centers is to point out that pervasive tagging can be an antiterrorist tool, for instance, it can protect the US from assaults on the food chain. It is claimed, rightly, that the technology can help keep precise track of all goods and help recall efforts should food products be contaminated or laced with poison during a terrorist attack.

 

In the opinion of IDTechEx, this approach is one of a number of sensible positions that the Auto ID Centers are taking on the matter. Another is to point out that the item level tagging envisaged can not be read at long range and only returns a code that contains a unique digital identification number and nothing about the person, the product or anything else. We would add that using that to invade privacy would be a severe challenge compared to information from human observation, today's pervasive video cameras including webcams, credit card statements and so on, so why bother?

 

We believe that mistakes are being made on both sides. We have already pointed out that the decision of the Auto ID Centers to major on killable tags is something that will jump up to bite them. The Centers have mandated that all item level tags will be electronically killable irrevocably at point of sale. We have pointed out that this will remove many of the paybacks that justify the tags in the first place such as efficient recalls, home inventory management, the microwave that knows how to cook that particular product, automated refund, replacement or store credit, automated warranty management, easy access to and updating of service records over the internet, automated market research beyond point of sale and so on. It certainly sits awkwardly with anti-terrorism measures. It will be impossible to comply with the US TREAD Act that mandates RFID tagging of tyres if the tags are dead when fitted on the car and you will also break the law in China and many other countries if you kill your national RFID identification card. At the supermarket checkout few will believe that the cashier pressing a button kills the tag anyway. Ironically, if she smashed it with a hammer most customers would be convinced!

 

One rejoinder is that creating the option for the customer at the checkout to have their tag killed addresses a civil liberty even if very few accept. However, if, in reality, few tags are killed at point of sale it could still look as if the proponents of RFID were living a lie and they have somehow always intended that the devices seep into society on a massive scale. It would be better if the argument was made that lives will be lost, illnesses and errors will not be prevented, costs will escalate, life will become more difficult and crime and costs will increase without item level RFID.

As we have said before, only one billion or so RFID tags have been sold in the last fifty years. However, world leader at the time, Sokymat of Switzerland sold about 60 million in 2000 when low frequencies were still favoured, though some of its output was 433MHz car clickers with batteries. We would guess that the average price was about one dollar, though AstraZeneca (under licence from Scientific Generics) was talking about 4.5 million a year of a chipless low frequency device at around 15 cents.

 

To some extent, the history of RFID can be explained in terms of frequency. Frequencies have increased in order to provide the thin low cost tags required for the new, higher volume orders and the multitag reading and fast data transfer and other new requirements. No surprise then that Texas Instruments moved up the league with a plethora of trials and rollouts of their 13.56 MHz devices in 2001. However, newcomer Innovision Research & Technology outsold them with one order for Hasbro for 30 million read-only 13.56 MHz tags in that year, these being around 15 cents each because, unlike the Texas products at one dollar, they were read-only and did not have individually unique IDs - for that application, such niceties were not required.

 

Do we look at what newcomer is going to leapfrog in frequency again to see the leaders in the future? Well, no. There are important technical reasons why the next higher licence free frequency, 2.45 GHz will not take the lead though it is quite popular in Japan and the US. At this frequency there is sensitivity to water at least as much as at UHF and the range is not as good as for UHF in most countries. However, it is possible to have a tiny microwire antenna and the chip can be very small.

 

So why do we not see 2.45 GHz becoming the biggest market? Well, the potential for 5 cent tags on conveyances, vehicles and airline baggage is tens of billions yearly whereas high value banknotes and vouchers offer slightly less - say ten billion yearly. There is scope for three billion smart cards and tickets yearly but here the standards fixed the application at 13.56MHz long ago and no one has reason to rip out all the infrastructure to put in higher frequency equipment for no compelling reason. After all, 5 cent smart tickets at 13.56 MHz that work in existing ticket machines are already in prospect. We therefore feel that the value market for RFID will settle about evenly between 13.56 MHz and UHF for the next ten years.

 

There is one final twist to our story. None of the companies mentioned has been in the lead with the most popular format so far - the RFID smart card. The smart card business remains ridiculously fragmented, with Sony the leader but only making about 10% of global demand for RFID smart cards, the rest being shared by a very large number of companies. Of course, the supply of other formats of RFID is also very fragmented but at least the leaders get orders that dwarf those enjoyed by the followers. One reason for the excessive fragmentation of smart card supply is that the applications are to government and pseudo government organisations in the main and they tend to favour national champion suppliers.

Although only one billion RFID tags have been sold since they were invented about 50 years ago, it will be little more than one year before the second billion are sold. The industry is now very much in fast growth mode but it is difficult for users or suppliers to establish whether their project has been done before let alone whether something similar has happened, perhaps in a different applicational sector. This is because the industry is so fragmented, with so many small, different applications though some will become very big indeed in due course.

 

 

Not that the idea is an original one. The need has been recognised for a long time but the immense effort to gather the data and keep it updated and the fact that much of the information has been secret have been deterrents. Excellent reports detailing twenty or so case histories have been published. Some journals publish the odd case history from time to time but that is not enough.

 

Now IDTechEx, with the most travelled team in RFID and the largest conferences has pulled it all together, without bias, for your benefit. "RFID Case Studies" will be available as a web-based database by October 2003. Use this unique resource to de-risk your project, to benchmark your business and convince your investors. This is the vital reference work for all in the burgeoning RFID industry. There are over 1000 RFID projects out there. Here is the low-down on 280 of them with more to come. Such a comprehensive analysis even begins to provide statistically meaningful base data for trends in the industry. No need to guess any more.

 

 

IDTechEx is currently compiling global RFID case studies to be viewed by application, company, hardware parameters, project costs and other fields. The case studies will be constantly updated and new ones added. Please send us details of your case studies for inclusion.

The Smart Card Forum of China reports that Shanghai No. 116 Research Institute had just developed an RFID label usable on metal surfaces.

The institute has successfully developed the first RFID label that can be tagged to the metal surfaces, and this product is put into mass auto production. RFID readers, if attached to metal surfaces, due to the metal shielding cannot read the data stored in ordinary RF labels. This disadvantage restricts the application of RFID in metal articles, such as military arsenals logistic tracking, annual testing for elevators, the management of gas cylinders, etc.

 

This problem has been solved with high magnetic materials with low loss of radio signal. The thickness of this RFID label is 1.1-1.2mm, flexible packing in the form of a small sticky label measuring 3.5cm by 5cm. The reading distance is between 3 and 5cm. This is a very low cost product.

 

This RFID label can be packed in plastic 2mm thick, and it is proofed against dust, sun, water and 'hard strike'.

 

We note that about ten million metal gas bottles and beer barrels are already RFID tagged typically using 125-135kHz devices of bullet shape inside the rim curls. An equivalent smart label is unusual and it will find many uses but be more easily damaged unless well protected.

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