Companies are moving beyond the ABCs of radio frequency identification technology. Taking a step forward from pilot projects and slap-and-ship solutions, many are seeking intelligent tag readers that can make decisions:

While RFID is essentially a passive way to collect data, tag readers with increased functionality enable users to wield control over local operations. For instance, an intelligent reader over a dock door can alert operators when a tag that does not belong in the data set comes along. Since the reader can run a software application for pinpointing specific tags, it does not have to send data back to a server before it can notify operators about the inappropriate tag. It can make the decision on its own and thus enable increased operational efficiency.

And this is exactly what users are coming to expect from RFID, the much-touted wireless technology that’s enjoying explosive growth. Along with compliance with retail and government RFID mandates, users are looking for tag readers with greater functionality, which encompasses “enhanced intelligence, better connectivity, and optimal performance,” according to an April 2005 article in Frontline Solutions.

“It is necessary to move more intelligence to the RFID reader because certain things in the RFID world need to happen in real time,” Kevin Ashton, vice president for marketing for ThingMagic, tells Frontline Solutions. “Readers should be general-purpose computers, and they should be capable of real-time data processing.”

Intelligent readers not only catch redundant tag readings, they can also reach decisions based on the tag’s data. Says the Frontline Solutions feature, think of a smart reader as a “server that runs additional business process logic implemented in software.” Since the intelligence is built-in, there’s no need to consult a database on a remote server to figure out what to do with the tags.

Indeed, RFID has come a long way–fast. According to Allen Nogee, principal analyst with In-Stat, a division of Reed Business Information, one word can explain the market’s tremendous growth: Wal-Mart. “This year, Wal-Mart is expected to handle over 4 billion cartons, and next year that figure is expected to rise to 5 billion,” Nogee tells Modern Materials Handling. “Wal-Mart alone will handle roughly 10% of all cartons shipped to retailers in North America.

The market for RFID tags will explode from some $295 million in 2004 to $2.8 billion by 2009, according to study conducted by Nogee called “RFID Tags and Chips: Changing the World for Less Than the Price of a Cup of Coffee.” That translates to a compounded annual growth rate of 57% for the next five years. In a word: wow.

Sources:

Rising Expectations for RFID Readers
Tom Kevan
Frontline Solutions, April 1, 2005
www.frontlinetoday.com/frontline/article/articleDetail.jsp?id=157962

RFID Tag Market Will Reach $2.8 Billion
Bob Trebilcock
Modern Materials Handling, April 19, 2005
www.mmh.com/index.asp?layout=articlePrint&articleID=CA525796