RFID fails market predictions, and will fail again in 2007

That’s the prediction from RFID applications watcher IDTechEx, which is now forecasting sales to rise from $100m next year to $450m in 2010. IDTechEx CEO Raghu Das says the optimism at the beginning of this year, founded mostly no the big retailers supposed mandates, has evaporated. “RFID tag production capacities had been put in place and Gen 2 was delivering superior performance than previous versions,” says Das. “However, arguably the pallet/case market for RFID tags became the nearest thing to a black hole in the RFID universe in 2006, thanks to reluctant mandated customers, technical problems and pricing for volumes that never came despite retailers reporting excellent paybacks.” IDTechEx says that in he consumer goods sectors it has found “considerable foot dragging resulting in pallet/case tag purchases being as little as 250—300 million tags at the heavily loss-making price of around 10 to 15 cents each.” It says readers have also been being sold at heavy losses, and believes that while there are examples of business benefits achieved in the retail market, “these benefits are not necessarily paybacks and companies are not saying they are sustainable.”