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Transcript of I International Workshop RFID and IoT - Dia 20 - The Global RFID Market and Future Prospects - Dr....
Copyright © 2013 IDTechEx | www.IDTechEx.com
The Global RFID Market and Future Prospects
Raghu Das / [email protected]
IDTechEx / www.IDTechEx.com
Copyright © 2013 IDTechEx | www.IDTechEx.com
Agenda
• About IDTechEx Research• RFID: The Big Picture• A Brief history of passive HF and UHF RFID• Market Size analysis• Value Chain and Tag cost analysis• Case Study analysis• New technology trends• Summary
Copyright © 2013 IDTechEx | www.IDTechEx.com
Overview of IDTechExIDTechEx provides market research that guides your critical strategic business decisions on printed electronics, electric vehicles, emerging materials, energy harvesting, energy storage and RFID/WSN. We provide:
− Market research reports− Events− Consultancy
We are technical, impartial and experienced in our chosen research topics.
•Globally cited analyst team combining technical analysts (most have PhDs) and successful business leaders. •Global Research: in Q1 2013 we visited Japan, USA, Germany, Belgium France, UK, The Netherlands, Canada, etc•Hundreds of interviews are conducted each year as part of our global research programmes with organisations across the value chain•60,000 global contacts in our targeted contact database of the RFID, RTLS and WSN industry
Copyright © 2013 IDTechEx | www.IDTechEx.com
Leading companies are our research clients
Copyright © 2013 IDTechEx | www.IDTechEx.com
RFID Technologies: The Big PictureTechnology type
Main Options Highest volume application
No. of tags 2013
Custom “chipless”
Magnetics, printed conductors, transistors
Promotional vouchers, access control
10’s of millions
Passive RFID LF, HF, UHF HF – contactless cardsUHF – apparel
Billions
Battery assisted passive RFID
HF, UHF. Improve performance or add sensing
Logistics (performance)Medical (sensing)
100’s of thousands
Active RFID 1st Gen. Point to point2nd Gen. Real Time Location Systems RTLS3rd Gen. Mesh WSN
1st Gen. Car clickers2nd Gen. Medical and manufacturing3rd Gen. Smart meters
10’s of millions
Incr
easi
ng c
ost
Copyright © 2013 IDTechEx | www.IDTechEx.com
RFID Choices of Parameter are AstronomicMagnitude of Choices
Frequency 3 Hz to 30 GHz 10
Order number 1 to 1 billion 9
Range 40 microns to 400m + 7
Tag size 0.1 to 10M Cubic mm 8
Tag price 0.1¢ to $1,000 6
Project cost $0.6k to $6bn 7One order of magnitude is a 10x difference
RFID is an enabling technology –not a single product
Adopters need to consider the best RFID solution for the problem
Huge Opportunity for Vendors:RFID has widespread application to almost all forms of human endeavour
What are the best markets to prioritize? What is the optimal value chain positioning?
Copyright © 2013 IDTechEx | www.IDTechEx.com
A Brief History of RFIDCumulative sales of tags from 1943 to the start of 2013•DIGITALLY‐ENCODED LOW COST RFID TAGS ABOVE 0.1cm RANGE•Worldwide sales cumulative numbers for cards, labels, fobs
•Chip 19.9 billion (2012 – 4.8 billion sold)
− Passive: 19 billion
− Active/RTLS: 910 million
•Chipless 230 million
Copyright © 2013 IDTechEx | www.IDTechEx.com
A brief history of passive HF RFID
Manufacture Cost Today
Application maturity
Main applications
Application profile
Profitability
6.8 to 17.5 + US cents
Mature with some standards being set well over a decade ago
• Contactless cards (transit, access, ID, payments)
• Tickets• Passports• Books• Medical• Assets/tools
Strongly government driven rather than industry driven
Usually strongly profitable
HF RFID (13.56MHz): 10.4 billion tags (labels, cards, fobs) sold to 2013
Copyright © 2013 IDTechEx | www.IDTechEx.com
A brief history of passive UHF RFID
Manufacture Cost Today
Application maturity
Main applications
Application profile
Profitability
4.7 to 14.5 + US cents
Embryonic • Retail apparel, shoes
• Medical• Assets/tools
inventory• Logistics,
conveyances• Airline baggage
Industry driven rather than government driven. Some gov. now e.g. road tolling
Shakeout and consolidation in recent years. A few are profitable on an operating level
UHF RFID (around 900MHz): 6.8 billion tags (labels etc) sold to 2013
Copyright © 2013 IDTechEx | www.IDTechEx.com
UHF passive RFID in retail – direct fit to the hype cycle curve
1999 2004 2008 2012
Wild enthusiasm that tens of billions of pallets/ cases could have sub 10 cent tags and
trillions of items a year in
supermarkets lower cost tags
Wal‐Mart, Metro etc mandate some CPG suppliers to tag pallets/cases. CPG co’s and the RFID industry lose $100’s millions trying to comply.
Mandate withdraws. Technically difficult.
Attitude
MIT concept of low cost
tags on everything
Marks & Spencer does it right with focus on ROI in manageable infrastructure, others do the
same
Period of huge investment Period of consolidation Sustainable profitable
growth
Copyright © 2013 IDTechEx | www.IDTechEx.com
Cumulative sales in millions of tags from 1943 to the start of 2012 Application
Number (millions)
Biggest markets by number
Drugs and healthcare 227Retail apparel and CPG Pallet/case 2360 2 – mostly UHFConsumer goods 75Tires 0.1Postal 45Books 640Manufacturing parts, tools 606Archiving (documents/samples) 44Military 293Smart cards/payment key fobs 4940 1 – mostly HFSmart tickets 1715 3 – mostly HFAir baggage 345Conveyances/Rollcages/ULD/Totes 252Animals (Livestock and Pets) 886 4 – mostly LFVehicles 60People (excludes other sectors) 112Car clickers 780 5 – LF and active RFIDPassport page/secure documents 335Other tag applications 1382Total 15097.1
• Very diverse, unrelated applications, addressing different problems
• Room for different technologies
Copyright © 2013 IDTechEx | www.IDTechEx.com
In 2012, passive UHF overtook HF for the first time by numbers of tags
Application 2012 2013Contactless cards/fobs 1100 1250Smart tickets 500 600Books 85 90Medical 20 22Assets/tools 100 105Passports 70 75People 4 5NFC apps (not payment) 1 3Other 20 25Total 1900 2175
Passive UHF (millions) Passive HF (millions)
[ LF 527million 2012, 646 million 2013 ]
CAGR based on IDTechEx research 2012-2018: UHF 33% HF 14%
Application 2012 2013Retail apparel, shoes 1675 2200Retail items other 20 25Logistics, roll cages conveyances 100 125Asset management/ inventory 400 500Medical/health care 15 18Air baggage and cargo 70 72Access Control/ticketing 1.2 1.5Embedded 10 15People 20 22Other 50 65Total 2361.2 3043.5
Copyright © 2013 IDTechEx | www.IDTechEx.com
… but lags considerably by value
Application 2012 2013Contactless cards/fobs 1650 1812.5Smart tickets 55 63Books 15.3 15.3Medical 3.6 3.74Assets/tools 18 17.85Passports 224 232.5People 4 5NFC applications 0.18 0.51Other 3.6 4.25Total 1974 2154
Passive UHF ($ millions) Passive HF ($ millions)
[ LF $619million 2012, $713 million 2013 ]
2012 2013Retail apparel and footwear 127.3 162.8Retail-other 1.52 1.85Logistics 14.0 16.9Asset management/ inventory 56 67.5Medical/health care 1.1 1.3Air baggage 5.32 5.328Access Control /ticketing 0.0912 0.111Embedded 0.25 0.375People 2.8 2.97Other 3.8 4.8
Total 212 263
Copyright © 2013 IDTechEx | www.IDTechEx.com
Passive RFID Interrogator Outlook 2013
TypeNumber
(millions)Market size ($
millions)UHF Fixed portal 0.035 47UHF Embedded and handheld 0.24 90HF and LF Hand held, fixed, embedded 5.5 770LF Vehicle 26 78NFC Cellphone 250 525Total 282 1510
• HF readers are simpler devices – can cost $10’s of dollars. UHF are more complex devices.
• NFC: the world’s biggest RFID reader infrastructure is barely used today! Driven by product differentiation. Hope for build it and they will come?
Copyright © 2013 IDTechEx | www.IDTechEx.com
Total RFID Market Size and Outlook$
Bill
ions
2013 - $8.27 Billion• Cards $3.2bn; Labels/tickets/fobs $5.07bn• Passive $7.29bn; Active $0.98bn
Copyright © 2013 IDTechEx | www.IDTechEx.com
Passive RFID Value Chain
Licensors of inventions and consultants
BIGGEST ORDERS so far $50M $50M >$111M $6000M
ChipsChip + antenna modules
Label rolls and dispensers
System Operatorsand Facilities Management
System Sellers, VARs, channel partnersand IntegratorsInterrogation
Electronics
Software
Horizontal (selling to anyone) Vertical (specialising)
Antennas
Copyright © 2013 IDTechEx | www.IDTechEx.com
Manufacturing Labels, tickets and cards
Source: IDTechEx
Components and other raw materials
Equipment
Substrate, inks, other raw materials
RFID chips Label stock raw materials
Manufacture RFID antenna
Finish (and apply) label, ticket or card
Populate RFID circuit
Produce RFID label, ticket or card
RFIDantenna
RFIDtags RFID Enabled
labels etc products ofcommerce
RFID chip manufacturing equipment
RFID antenna manufacturing equipment
RFID enabled labels etc manufacturing equipment
label applicators and printer applicators
For highest volume markets, there is insufficient tag price to give profit to all the companies doing little bits of this value chain. Oversupply in 2005-2010, now consolidated
Copyright © 2013 IDTechEx | www.IDTechEx.com
Tag Price ComparisonsComponent Typical cost today for UHF Typical cost today for HFChip 1.8 - 6 US cents or more e.g.
UHF EPC Gen22 - 20 US cents or more, depending on chip.
Chip attach (e.g. flip chip) 1.1 – 2.5 US cents 1.5 – 2.5 US cents
Adhesive – chip to substrate 0.4 US cents (e.g. from Delo)
0.4 US cents
Antenna and substrate 1 - 2 US cent from various vendors
2.5 US cent from various vendors
Antenna manufacture equipment depreciation, processing cost
0.1 to 1 US cents depending on equipment cost, energy required etc
0.1 to 1 US cents (usually slightly more than UHF where HF tags are larger)
Cost of non working tags i.e. yield due to defects. Automated machines may achieve 96 to 99% yield
0.3 to 0.6 US cents 0.3 to 0.6 US cents
Total typical cost range per tag (volume dependent)
4.7 to 14.5 cents or more 6.8 to 17.5 cents or more
Copyright © 2013 IDTechEx | www.IDTechEx.com
Passive UHF RFID – after the shakeoutMain passive UHF inlay manufacturers in 2012
Company Market share*
IDTechEx Comment
Avery Dennison 1 Took a big loss but withstood the shakeout, profitable operation but may not have recouped investment yet. Belatedly moved into HF
Smartrac 1 Highly profitable. LF and HF for access, passports etc. Acquired UPM’s UHF business
Alien Technology
2 Took a big loss but withstood shakeout. May have profitable operation but not recouped investment. Moved downstream, offering readers.
Others e.g. Invengo, etc
3 Chinese and others enter. Many smaller operations with custom antennas for different applications
* IDTechEx estimate
Copyright © 2013 IDTechEx | www.IDTechEx.com
About 1,000 RFID companiesglobally
$100+ millionAllflex Australia
Assa Abloy EuropeAvery Dennison US
Nedap EuropeNXP Europe
Smartrac Europe3M US
$20-$100 millionAeroScout/Stanley US/ Israel
Alien Technology USASK France
Datamars, EuropeFeig, Germany
HP USAIdentive Group Europe/US
Impinj USMotorola USUbisense UK
Zebra USUnder $20 million
Majority
IDTechEx estimates
Copyright © 2013 IDTechEx | www.IDTechEx.com
2013 RFID value chain positioning• 2008-2012 saw a much needed consolidation in tag manufacture
(UHF RFID)• Successful companies on the left engaged with end users for pull
through demand• Biggest orders are on the right of the value chain – systems
supply/management• Systems integration tends to be localized to a geography or by
application.
• Ultimately, it is all about the value the technology provides, one vendor told IDTechEx “When we called ourselves a RFID company it was a disaster. When we called ourselves a solutions company we had success” - Euro180million company
Copyright © 2013 IDTechEx | www.IDTechEx.com
Case Study Analysis: What are the “hot”applications and why?
Rapidly growing applications for passive RFID are:
1.Apparel item level RFID (UHF) − Marks & Spencer apparel, Wal-Mart…
2.Asset Tracking/Inventory (UHF) – closed loop− Equipment, tools, inventory, medical …
3.Transit Ticketing (HF) - government− transit ticketing
4.Animals (LF) – government− Sheep, cows, pigs…
Copyright © 2013 IDTechEx | www.IDTechEx.com
1. Apparel Item Level RFID2005: Passive UHF RFID needed to find a problem it could fix.
− Retail pallet/cases was not the answer. Payback was uncertain and probably not that much vs huge investment needed.
− It only promised cost reduction. Retailers and CPG companies, however, want more sales (and have larger budget here)
− Technically too difficult at the time
Perhaps ironically, item level tagging happened first…
Copyright © 2013 IDTechEx | www.IDTechEx.com
1. Apparel Item Level RFID
The problem
“” Stockouts at clothing retailers can cost six percent of sales. A quarter of these items are typically in the retailer’s store.””
“” Some specialty retailers will only have one or two items of a particular color or size on the floor.””
Copyright © 2013 IDTechEx | www.IDTechEx.com
1. Apparel Item Level RFIDWhy tagging apparel with RFID is successful:
•Minimal infrastructure cost per store – initially 2 hand helds, and one portal on average – approx $5K investment
•Suits technical capability of passive UHF
•Payback does not break down if some tags are not read - something good is better than nothing
•Typically high value or high replenishment items
•Relatively easy process change – non RFID labels were previously applied to clothing
Copyright © 2013 IDTechEx | www.IDTechEx.com
1. Apparel Item Level RFIDResults:•Retailers interviewed by IDTechEx report sales uplift from 4 to 20% without increasing stock levels.
Plus•Reduction in manual stock counts•Better knowledge of where stock is throughout the company•Soon: RTLS and EAS
Many stores are in roll out or full adoption e.g. Walmart, American Apparel, Macy’s, Zara, JCP, Marks & Spencer, Memove…Others are in pilot and evaluation.Total Addressable Market approx. >40 Billion per year (2013 will be approx. 2.2 Billion).
Copyright © 2013 IDTechEx | www.IDTechEx.com
2. Asset tracking/inventory2013: passive UHF 400 million tags
Leveraging the high performance now available from UHF G2 at low price points.
Applications are very diverse, usually 10,000 to a million tags per location, but offer rapid ROI (typically 12 months) by increasing efficiency, reducing cost, increasing safety, convenience etc
Copyright © 2013 IDTechEx | www.IDTechEx.com
3. Transit TicketingThe Problem: Growing cities need an efficient transportation system.
Contactless card systems deployed in major cities for frequent users. One-time use “magnetic stripe” tickets cost US $0.04 but need extensive mechanical reader maintenance –costing >$0.1 per ticket.
Single use RFID tickets can leverage solid state infrastructure and improve passenger throughput.
2013: passive HF 600 million tags(Moscow transit use 25-30 million a month)
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4. Animal TaggingThe Problem: Food traceability, identifying disease, stopping disease, yielding maximum return on best cattle
Widespread diseased meat or unknown food sources can cripple major economies, or terrify consumers!
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4. Animal TaggingGovernment mandates force RFID adoption. Tags can also help farmers monitor cattle and find best livestock for breeding, wool etc.
2013: passive LF (some use HF and UHF) 375 million tags
New laws may only be satisfied by RFID: e.g. EU directive in 2013 calls for animals being able to roam for a certain amount of time. RTLS providers believe they are the only viable solution to monitor cattle health –indeed – they can even detect if a cow is pregnant by how it moves.
Copyright © 2013 IDTechEx | www.IDTechEx.com
4. Animal TaggingRFID vendor case study:Allflex, animal tagging solutions company.
Bought by Electra in 1998, investing $45 million as the EU tightened beef regulations after the mad cow disease crisis
Became a leader in animal identification using electronic reader technology, implants and tissue sampling.
In May 2013, Electra Partners sold Allflex to private equity company BC Partners for about $1.3 billion
Copyright © 2013 IDTechEx | www.IDTechEx.com
Government has so far driven RFID adoption more than industryLargest orders are placed by the Government
•China National ID Card $6 billion HF•ACS for New York/ New Jersey EZ Pass $500 million UHF Active •US DoD $ 1 Billion in orders 433 MHz Active •E-passport infrastructure in 70 countries HF•Animal tagging demanding 375 million tags in 2013 LF•Transportation Systems e.g. London Transport $1.6 Billion HF•US Gov Accountability Office gives $543 million contract to HP RTLS
Governments do not always need ROI like industry – they seek security, safety, efficiency, world-class prominenceUsually, suppliers are highly profitable on these projects
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Case Study Assessment from the RFID Knowledgebase
IDTechEx has tracked 4,603 case studies in 124 countries. Here are the trends.
US and Europe about equal, Asia rising. South America growing quickly
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Project Status
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Frequency Band
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Application
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1 2 3
WSN
RTLS
Conventional
Generation 1 = Conventional active RFID 433MHz, 2.45GHz etc. ISO standards exist
E.g. car clicker $2bn so far, non-stop road toll $0.5 billion order recently, military supplies $0.5 billion
Generation 2 = Real Time Locating Systems 433MHz, 2.45GHz, UHF, WiFi, UWB, Ultrasound…
Some large orders emerging but most are small orders of a few million dollars as yet. Acquisition frenzy and many newcomers
Generation 3 = Mesh and WSNTags are readers. Form adhoc networks. Monitor condition.
time
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Envisaged applications for WSNEnergy Saving
Predictive Maintenance
Improve Productivity
Smart Home
Healthcare
Improve Food & H20
Remote Controls GamingPrice Display
Transport and Assets Tracking
Source: Jennic
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Energy Harvesting to overcome battery lifetime limitations?
Deployed in 300,000 buildings, mainly as switches and sensors
Evaluated by car companies
Used in trains, aircraft etc
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*Software, infrastructure, installation, commissioning etc
ACTIVE PASSIVE
Small project Large project Small project Large project
Tag cost 10% 30% 20% 50%
Other cost* 90% 70% 80% 50%
Cost structure of active vs passive RFID projects
Copyright © 2013 IDTechEx | www.IDTechEx.com
Active RFID / RTLS / WSN
• End users have a large choice of different protocols – some may become obsolete. So-called interoperable systems are sometimes not. Standards may not be optimal. It is confusing!
• The successes are typically in small, closed loop installations with proven ROI rolled out in a “cookie cutter” approach
• Start-ups that became successful tend to have a strong software and hardware offering, provide a complete solution, and do some integration.
• As with passive, big orders are government driven e.g. $543 million contract to HP, US DoD orders totalling over $1 billion, smart meter mandate
Copyright © 2013 IDTechEx | www.IDTechEx.com
NFC/RFID enabled cellphones• NFC – a standard of standards: ISO 14443 A;
ISO 14443 B; Sony “type C”
• Enabled by Samsung, Nokia etc seeking product differentiation in smart phones
• Can enable a huge RFID infrastructure at no cost to retailers, consumers etc – far bigger than any other RFID network, with 250 million RFID phones to be sold in 2013
• Beyond payments and data sharing, use cases are small scale, pilots. Business models not mature.
• Many retailers we interview say that they are waiting for Apple to adopt NFC
A ubiquitous RFID reader network…
Copyright © 2013 IDTechEx | www.IDTechEx.com
Options for ultra low cost “tags”?
Printed electronics will not impact Si RFID IC, may be used for the antenna, but it will enable smart packaging/ products etc and use the interface as RF power.
Copyright © 2013 IDTechEx | www.IDTechEx.com
The Internet of Things (again)Term developed by MIT Auto ID Center in 2000. UHF RFID industry is much more pragmatic today.
Different services, technologies, meanings.
Now often used by those in wireless sensors, smart devices, M2M etc.
>> the challenge will be linking up these disparate systems that do no communicate with each other today.>> potential to confuse end users. IoT is a vision but users want to see real added value. IoT is a system but users want solutions: we need to define what the solution (and before that, the problem!) is.>> scope to be driven by consumers – e.g. LBS, Google, Apple, Samsung etc
Copyright © 2013 IDTechEx | www.IDTechEx.com
Trends by TerritoryNorth America32%
Europe32%
East Asia33%
South America1%?
Strong Gov. Backing
Strong UHF, HF
Many in roll-out
Strong supplier base
Strong Gov. Backing
Strong HF, LF and UHF
Many in roll- out
Strong supplier base (but more localised by country/ fragmented)
Strong Gov. Backing
Strong HF, LF
Many in trials, some roll-out
Rapidly growing supplier base, country specific
Strong Gov. Backing now coming in place
More and more in trials, a few roll-outs
Emerging supplier base- Fabs coming online in Brazil etc
Copyright © 2013 IDTechEx | www.IDTechEx.com
Summary and Conclusions
• Great time to get involved in RFID − End users can see the benefits from competitors/other industries;− Good reference case studies exist; − Technology performance vs cost is very good thanks to others investing
huge amounts over the past decade which you can leverage
• Huge opportunities exist: still a very embryonic industry which has barely touched most application segments
• Governments have driven many RFID projects. Industry now waking up.
• Be careful of hype – that is not where the profit may be. Know what the problem/driver is.
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For more read:
www.IDTechEx/research
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www.IDTechEx.com / [email protected]
IDTechEx provides ongoing support to your business and carries out special projects: market and technology appraisal, competitive assessment, masterclasses, technology forecasting, acquisition and investment targets, opportunity evaluation …
Offices: USA Tel: + 1 617 577 7890 UK Tel: + 44 1223 813703Germany Tel: + 49 3020659 455
IDTechEx supports your strategic business decisionson emerging technologies
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Presenter – Raghu Das
Raghu Das, CEO of IDTechEx, studied physics at the University of Cambridge. He has been closely involved with the development of RFID and printed electronics for fourteen years, carrying out consultancy in Europe, USA, Asia and the Middle East. Examples of recent work includes:
•Mr Das has completed a study for a $73 billion public organization in the US, benchmarking its internal processes and new identification system against RFID.•A major systems integrator wanted to buy an RFID company. Mr Das provided due diligence and based on our advice they decided not to invest.•Providing consulting for a $40 billion company who was looking to participate in the printed electronics market and leverage their expertise as a global materials company…
Contact [email protected] Tel: +44 (0) 1223 813703
Copyright © 2013 IDTechEx | www.IDTechEx.com
Varied company positioning
Licensors of inventions and consultants
BIGGEST ORDERS so far $50M $50M >$111M $6000M
ChipsChip + antenna modules
Label rolls and dispensers
System Operatorsand Facilities Management
System Sellers, VARs, channel partnersand IntegratorsInterrogation
Electronics
Software
Horizontal (selling to anyone) Vertical (specialising)
Antennas