Evan Schuman's StorefrontBacktalk

With retail pinning many of its hopes on item-level RFID, the interest in lowering prices is at a fever pitch. Per-tag prices are still out of reach for lower-priced items, but there’s a new report from IDTechEx that seems hopeful.

Given that increasing global purchase volumes are the only reliable way to drop prices, many feared that the recession would cause a sharp drop in such RFID purchases. And yet, IDTechEx is seeing a global increase and a surprising one at that.

“Despite the world’s largest RFID project, the $6 billion China National ID card scheme, being completed a year earlier, the global RFID market is rising 5 percent this year to $5.56 billion, in the face of the global financial meltdown which has caused some car production, for example, to plummet by 50 percent,” wrote IDTechEx CEO Raghu Das. “In many applicational sectors, RFID orders are up 10 percent.”

The bulk of those RFID orders are coming from the U.K., China, Japan and especially the U.S.. “Currently, RFID tags are attached to approximately 125,000 shipments of US military supplies each week,” Das wrote, before rattling off several large U.S. (non-retail) RFID projects. “For most of these suppliers, the new orders are their largest orders ever.”

The report also found the differences in RFID deployment growing sharply between East and West. “This year, the Chinese are putting RFID where it is not encountered in the West such as in checks and on fast fishing boats to prevent collisions. However, China is also making the world’s largest investment in installing RFID throughout its factories and supply chain in order to underpin the nation’s pre-eminence in manufacturing,” Das wrote. “An order for $8 million of RFID enabled casino chips has been placed by establishments in Macao and the Philippines. Hong Kong is particularly active in RFID. Japan continues to buy over 90 percent of the world’s RFID enabled mobile phones. They can be used to buy access to public transport as well as goods in many retail shops. RFID is certainly more widespread, with the IDTechEx RFID Knowledgebase tracking what are now 3800 projects in 110 countries. In China, the number of RFID projects tracked has more than doubled to 281 in only two years”

The report also saw the first orders being placed for Wireless Sensor Networks, the so-called Third Generation for Active RFID. “They have taken many fairly modest sized orders initially but enough to make the market for WSN overtake the market for RTLS – Second Generation RFID –though the two do not yet compete with each other. RTLS first took off one year earlier when more than 100 US hospitals adopted it.”