RFID 2007 Market Forecast Slips 15%

The RFID software and services market for 2007 will be $3.1 billion, according to ABI Research, an Oyster Bay, N.Y.-based research company. This represents a 15% decline in the firm's previous market predictions.

"Four interrelated factors, particularly within asset-management and supply-chain-management RFID markets, have led us to revise our forecasts," said RFID practice director Michael Liard, ABI Research. "They are: market consolidation, collaborative solutions, the growing availability of off-the-shelf commercial RFID software packages and the improving level of skills in RFID project planning."

The firm cites current practices in the industry, rather than a specific decline, as the reason for the lowered expectations. Consolidation among RFID vendors and service providers will lead to "better-managed, more efficient solutions," including "enhanced efficiency through cross-industry software and applications."

"The goal is seamless integration," notes Liard. "Companies wishing to integrate RFID into the enterprise will naturally turn to their established software and service providers. If those vendors don't have a solution, they will frequently either build or buy one."

Another evolution of RFID, according to ABI Research, is that with technology becoming standardized, companies do not seek to use multiple sources for their RFID needs. Companies can now find off-the-shelf packages that "fit lower RFID integration budgets."

Looking at the need for an ROI from RFID, Laird explains, "'Install in haste, repent at leisure' used to be a common pattern in growing RFID deployments, but with today's better planning, there's less waste, and less software needing premature replacement. End users are taking a more managed approach to budgeting and integrating RFID solutions internally."

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