The secret to RFIDs success? Price cuts

Recent announcements from Alien Technology and Avery Dennison suggest that the prices of RFID tags are finally coming down. Alien has cut the price of its straps to 12.9 cents, while Avery Dennison is offering inlays at 7.9 cents. Even that sub-8-cent price is still well above the five cent point that some industry analysts have cited as the price needed to ensure a viable RFID industry. But that number has more recently been viewed as too simplistic in any case.

"These new low prices may represent loss-leaders," comments Erik Michielsen, ABI Research's director of RFID and ubiquitous networks. "But when you tie them to the new products and services offered by software companies to help end-users make sense of their RFID data, and to the recent spate of EPC Gen 2 announcements, we may have a three-headed 'benevolent monster' that will promote demand." ABI Research monitors and evaluates global RFID markets.

"We are starting to see lower cost hardware, tested and proven performance requirements around a new standard, and software that enables non-technology focused end-users to make better decisions and find ways to drive revenue growth and cost refinement,” Michielsen adds. “All together, these factors support widespread RFID deployments across a wide range of vertical markets, to a degree we have not seen before."

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