RFID sales to reach $3.1bn in 2007

ABI Research has revised its forecasts for the wireless tag technology

Sales of RFID technology will not grow as fast in 2007 as previously expected, according to a revised forecast yesterday (10 August) from US analyst firm ABI Research.

The company said it had cut its forecast for sales of RFID software and services by around 15 percent to $3.1bn, but insisted the adjustment was due to the maturity of the market rather than any decline in interest in the technology.

Michael Liard, RFID practice director at ABI Research, said in a statement that the growing availability of cheaper off-the-shelf RFID systems and improvements in RFID project planning will lead to firms spending less on RFID than expected.

"Install in haste, repent at leisure used to be a common pattern in growing RFID deployments," Liard added. "But with today's better planning, there's less waste, and less software needing premature replacement. End-users are taking a more managed approach to budgeting and integrating RFID solutions internally."

ABI added that consolidation among vendors and the emergence of new RFID standards also meant that firms would spend less than expected on integrating RFID technologies.

ABI’s announcement followed a series of security scares around RFID, which last week culminated in a German researcher demonstrating that it was possible to clone data held on certain types of RFID tags.

Some experts said this development, following news that it is possible to introduce malware to RFID chips, would slow adoption of the technology.

But others argued that the growing number of successful pilots, where RFID has helped to optimise supply chain operations, means interest in the technology will continue to grow.