ABI: RFID Market Up For Grabs

The RFID Tag Market is up for grabs, even as working groups hammer out protocols for equipment manufacturers, according to the latest Quarterly RFID report from ABI Research.

However, evolving and not yet ratified standards that surround the RFID tag protocol are making progress, which has players moving into position for a piece of the action. A new standard for tags is to be in place by October 2004.

EPCGlobal’s Hardware Action Group is currently considering proposals for the Generation 2 EPC air interface protocol, which is the specification that allows readers to communicate with tags.

Three groups of vendors are vying to build for the spec that wins out. They include Unified Group, which consists of Philips, Texas Instruments and startup Impinj. Performance Group consists of EM Microelectronic Marin, Matrics, and Atmel. The Q Proposal is by Alien Technology. All of their proposals are somewhat based around ISO 18000-6A, though each have their own technology approach.

ABI Research said, so far, Performance group member Matics’ Class 0 chips and Q proposal’s Alien Technologies Class 1 chips are considered market leaders. Erik Michielsen, Prinicipal Analyst at ABI Research, concludes that as soon as the Gen 2 chips are ratified the first mover advantage in Gen 1 chips will be lost. Michielsen said backers of the winning specification will already have their designs in place and will be able to ramp up production faster than the losers.

Existing Gen 1 chips will still work in the new Gen 2 environment, but Michielson told internetnews.com that he expects all makers to move to the Gen 2 spec as soon as it’s ratified.

The ABI Research report also drew a number of other conclusions, most notably that more companies need to take RFID more seriously.

“What we found in our latest report is that companies need to take a strong look from an executive level to ensure that RFID is thought of not as a short term solution for these mandates but, in broader terms, for tranformative aspects,” Michielsen told internetnews.com.

It’s still early yet though. He said many companies are still waiting on the sidelines instead of spending money on RFID, for now at least.

But Michielsen believes players like Wal-mart and the US Department of Defense, who are requiring their suppliers to use them, may help spur wider adoption.

“RFID is a big thing. It’s here to stay and it’s going to be an expensive endeavor with huge potential returns,” Michielsen said. “If you’re just going to spend a couple of dollars today and not understand what it can do for your organization. You’re going to suffer in the long run.”