AMR research believes that RFID has finally reached its tipping point due to vendors recent focus on value-based innovation

publication date: Mar 14, 2008

AMR Research analyst John Fontanella issued a briefing proclaiming that RFID adoption has quietly crossed a threshold that many industry observers have been impatiently anticipating for the last few years: the tipping point. RFID Update spoke with Fontanella about his thesis, "RFID Reached Its Tipping Point -- And No One Noticed." Fontanella argues that because projected RFID adoption from the Wal-Mart mandate never materialized, vendors were forced to explore other possibilities for the technology. "When the industry realized that the enormous demand from Wal-Mart was not going to be the case, the idea of innovation kicked in," explained Fontanella. "Vendors said to themselves, 'Let's see what problems in the enterprise we can solve with this technology.' That sent vendors looking for opportunities." As disappointing -- and in some cases damaging -- as the Wal-Mart mandate was to the industry, it could ultimately be for the best. Now RFID vendors can offer myriad solutions to a wide variety of clients. The alternative would have been just one application (compliance), dependent on only one or a handful of companies (Wal-Mart, Target, Best Buy, etc.). "As a vendor, I'd much rather be looking at a million different applications for the technology, than looking at just one Wal-Mart," Fontanella said. "I think the market today is much broader, much healthier, and much more diversified." Companies like Alien, Avery Dennison, ODIN technologies, Xterprise, OATSystems, and ThingMagic were closely associated with Wal-Mart compliance just a few short years ago. Now, those same companies regularly announce deployments or applications that have nothing to do with the retail supply chain. That said, retail supply chain adoption is witnessing a resurgence, with retailers like METRO Group and Sam's Club mandating RFID tagging, and adding levies for non-compliance. "None of this is to say that the retail supply chain isn't viable for RFID," said Fontanella. "There is a lot of supply chain activity around the world."

Full Story