RFID Readers: Cost And Efficiency Benefits Driving Adoption Of Passive RFID Readers In North America

Research and Markets has announced the addition of the Frost & Sullivan report: Opportunities in the North American Passive RFID Readers Market to their offering

The Frost & Sullivan research service titled Opportunities in the North American Passive RFID Readers Market provides an insight into the passive North American RFID readers market with a special focus on the different types of readers on the basis of frequency. The revenues generated by the readers in the North American region are provided along with all the market drivers, restraints, and industry challenges. In addition to this, end-user segments that have benefited by the use of RFID have also been included with good examples of them using RFID to improve their revenues. In this research service, Frost & Sullivan's expert analysts thoroughly examine the retail, aerospace, healthcare, manufacturing and other applications.

The following technologies are covered in this research:

• Radio Frequency Identification (RFID): RFID technology is a part of automatic identification (auto ID) technologies, which involve capturing the information that is assigned to a particular object and comparing it with an existing record to check for authenticity or identification and record keeping. In simple terms, the RFID system consists of the following: Tags or transponders, Readers or transceivers and Middleware.
• RFID Reader: An RFID reader contains a module, a control unit and a coupling element. The module typically contains a transmitter and the coupling element an antenna. Energizing, demodulating and decoding are the three basic functions of a reader. There can also be additional interfaces which convert the radio waves which are emitted by the tag into some other meaningful data that can be passed on to another system.
• RFID Tags: Tags or transponders are microchips with built-in antennas that are attached to the item that is to be tracked. All tags have unique identification numbers used to identify each tag. Tags can be classified into passive and active tags. Passive tags do not have internal power sources, while active tags have them. Passive tags use the energy from the signal sent by the reader to transmit the information encoded in their memory. Since they do not have internal batteries, passive tags can be used only for short distances. These tags, however, are inexpensive and hence more commonly used. Active tags can be used over long distances, but they are more expensive and also larger in size, which restricts their use in many applications.
• Middleware: The middleware is basically a data processing subsystem that is used to process and store data. It is normally present between the reader and the enterprise application. The middleware filters the data from the reader and passes only the relevant information to the enterprise application. There are also some instances where the middleware controls the reader.

Cost and Efficiency Benefits Driving Adoption of Passive RFID Readers

With many organizations having started using radio frequency identification (RFID) in their systems and numerous others expected to follow suit, the stage is set for a huge influx of RFID and its related products in many organizations in the next few years. The cost and efficiency benefits of RFID make it an attractive alternative to the existing bar code technology and this apart, it also provides an effective way of tracking inventory, which will help in reducing counterfeit products in most of the industries. What is more, a significant number of successful pilots in the RFID industry over the last few months have further reinforced the benefits of RFID and concerted efforts by companies in the RFID arena toward adopting a global standard are expected to go a long way in removing the seeds of doubt among many companies wanting to adopt the technology.

However, the main challenge facing the RFID readers market currently is the read-rate of the RFID tags by the readers. As RFID uses radio-frequency fields, the read performance can be highly varied and hard to predict due to the properties of electromagnetic fields. "A number of environmental factors can affect performance and imperfections in the shape of tags may also lead to faulty readings," notes the analyst of this research service. "Companies have also had to deal with problems related to tags which were dead on arrival."

Mandates from Retail Companies and the U.S Department of Defense (DoD) Expected to Drive Demand

The mandate by Wal-Mart and other retail stores as well as the U.S. DoD to all their suppliers to tag their items is a major driver for the North American RFID readers market and the RFID industry in general. This has pressurized suppliers to include RFID readers in their warehouses and hence will drive the sales of RFID readers over the next couple of years. As the direct suppliers to these retail companies transform to RFID, the demand to track the products prior to their arrival at the distribution centers will also grow. This includes tracking products once they leave a supplier’s shopping dock until the time they arrive at the retailer’s distribution docks, and sometimes even further upstream into the suppliers’ distribution process. This ripple effect will certainly drive more companies to go in for RFID for their systems and will result in the production of more effective and less expensive RFID readers.

With regard to the types of readers, high frequency readers continue to be more widely used, closely followed by the ultra-high frequency (UHF) readers. However, UHF readers are fast catching up with the high frequency readers on account of the reducing prices of UHF tags, better read range and capabilities, and efforts toward standardization in the UHF domain. There is also a general shift toward readers with higher frequencies in view of the better read distance and the decreasing tag and reader costs. "In terms of industry verticals, Healthcare offers a lot of scope for RFID readers while the retail sector is also a major participant with a lot of trials going on in the vertical," says the analyst." A lot of companies in the retail space still do not use RFID across the entire supply chain with a few exceptions such as Wal-Mart Inc., Target Corporation, and some others."