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USA:Analysts predict spending on RFID research to grow
three to five times in 2005 |
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2005-1-10
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According to the ABI Research, a consulting firm based in Oyster Bay, revealed that RFID deployment budgets 2005 will finally reach the levels that analysts had predicted for 2004, but smaller RFID hardware, software and services suppliers that have worked on last year''''s small pilots will have a hard time keeping these customers to themselves as these projects evolve.
After failing to meet previously predicted levels, spending on RFID is expected to grow three to five times in 2005.
Earlier, analysts had predicted that Wal-Mart''''s top suppliers would spend between $1 million to more than $500 million on their first RFID pilots in 2004, but each company spent an average of about $500,000. Spending on RFID, however, is now anticipated to grow significantly by the end of 2005.
Erik Michielsen, Director of RFID research at ABI Research, said, "We are seeing companies increase their RFID budgets three to five times this year compared with 2004."
According to research, RFID spending in 2004 was held back for a number of reasons including limited availability of equipment and services as well as a conservative attitude toward adopting RFID that saw companies investigate the technology and its limitations. That work will prove a key foundation for 2005.
"The year 2004 was a great one for feedback from end users to RFID hardware and software developers. End users worked with smaller RFID companies and made those companies understand that they needed greater performance and scalability from their products," Michielsen said.
Although smaller RFID specialist companies helped develop these pilots, ABI believes that in 2005, end users will increasingly call upon larger partners to develop and manage their RFID deployments.
"Corporate IT staffs don''''t want to work with a number of competing, small companies to pull together their RFID deployment. They want to work with the large IT partners that already have strong footholds inside the companies operations and have already proved themselves," said Michielsen.
Today, existing RFID-technology suppliers such as Avery Dennison, TI, Philips, Symbol and Zebra, or IT specialists including Cisco, IBM, Microsoft, Oracle, SAP and Sun, will be the beneficiaries of RFID dollars even though RFID isn''''t their core business. However, they will also have to strengthen their RFID capabilities.
"In 2004, these companies added resources and spent marketing money on RFID, but now they have to get better versed at RFID," added Michielsen.
In order to do that, many are likely to turn to those smaller RFID companies either as new partners or as acquisition targets.
"The small guys won''''t get pushed out entirely. They have some of the brilliant people that have turned RFID into a progressing reality. Smaller RFID companies will be swiped up for their personnel and talent rather than intellectual property," Michielsen concluded.
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