RFID spending

The adoption of RFID continues to gather momentum, and hardware and software spending will accelerate in late 2006 and 2007 as true benefits are documented, according to Gartner, Inc.

RFID will begin to experience broader industry adoption with business value-focused implementations towards the end of 2006 when new licence revenue totals US$751 million. By 2010, Gartner forecasts worldwide RFID spending to surpass US$3 billion.

Jeff Woods, research vice president at Gartner, says businesses are beginning to discover business value in places where they cannot use bar coding, which will be the force that moves RFID forward.

Gartner analysts said companies should not think of RFID tags as a replacement for bar codes. The two technologies will coexist with users applying the right data collection technology for the right process situation.

"For the most part, bar codes are better at collecting data in highly structured and engineered processes, such as warehouses, and this will likely continue for the next five to seven years," Woods said.

Industries with the greatest opportunities to use RFID include retail and aerospace and defence, while the healthcare, logistics and pharmaceutical industries will adopt RFID the fastest.