Global RFID Technology Market Valued at $10.53 Billion in 2015

In “RFID (Radio Frequency Identification) Technology Market Analysis By Product (RFID Tags, RFID Readers, and Middleware), By Frequency, By Application, By Region, And Segment Forecasts, 2014 – 2025,” GrandView Research values the global Radio Frequency Identification (RFID) Technology market size at $10.53 billion in 2015.
 
The RFID technology is expected to witness a steady growth in the coming years, which is attributed to the increasing demand for locating, tracking, and monitoring objects and beings for security, safety, and resource optimization. As the world moves toward Real Time Location Systems (RTLS), sensor networks, and Internet of Things (IoT), radio frequency identification devices are anticipated to play an increasingly important role in capitalizing on these technologies.
 
The systems, deployed in the industry are composed of three major components, namely tags, readers, and middleware. The tags form the largest part of the market and are subject to prime development activities. While the deployment of passive tags is the largest in the industry, active tags are also gaining momentum as numerous new applications have sprung up in the recent years and the tag size has continually been reducing.
 
The major trends aiding in the radio frequency technology adoption are automation, supply chain management, real-time intelligence, asset tracking and payments, and NFC. The government mandates for the use of RFID tags for tracking various industry products, such as defense, livestock, and data centers, are also proving to be important factors in the industry’s development.
 
Technology advancements in the UHF technology, the convergence of RF-devices with other communication technologies, and the growth in semi-passive and printed tags are anticipated to drive the market growth in the coming years. In addition, hybrid systems, pre-printed tags, and efficient memory usage are the pivotal opportunities that solution vendors are focusing on.
 
As the industry has been maturing, there have been increasing efforts for the standardization of products and frequency bands. ISO, EPC, and RAIN RFID are some of the organizations are expected to play vital roles in this process. Intellectual property rights, product licensing, innovations, as well as a well-developed supply chain are the key factors that are anticipated to shape the future of organizations over the forecast period.
 
While tags hold the largest market share in the industry, the middleware segment is anticipated to gain a significant share in the coming years, which is attributed to the demand for actionable intelligence in many application industries. The middleware segment is also set to benefit from the emergence of real-time and on-device computing and is expected to act as the bridge between the technology’s current and future applications (such as IoT & wearables). In 2015, the tags segment was the most dominant, with more than 50% of the overall revenue share.
 
Owing to the reducing costs related to production over the value chains, the tag and reader vendors would exhibit a greater cost-to-volume benefit over the forecast period. The readers segment growth is anticipated to be proportionate to the tag segment growth with the handheld readers being the dominant type.
 
These include a diverse set of applications, such as inventory tracking and control, retail item tagging, supply chain, animal tracking, and access control to name a few. Of these, the retail sector is the largest adopter of RFID tags and is followed by the industrial segment. The retail segment in North America is estimated to grow at a CAGR of 12.6% in coming years.
 
While the government segment is expected to witness a substantial growth in the coming years, the healthcare sector is also anticipated to exhibit a large-scale adoption of the technology. As the RF-identification technology proliferates, many issues such as interference, privacy and security concerns, and accuracy may pose challenges to its growth and extensive research and development activities are underway in the industry. 
 
While high frequency tags hold the largest revenue share, the ultra-high frequency tags are expected to gain rapid market adoption in the coming years owing to their growing demand in inventory management, pharmaceutical applications, and wireless device configurations. The ultra-high frequency Devices has overtaken the high frequency tags in terms of volume; however, owing to the high cost of high frequency tags, they still generate large revenue for the vendors.
 
The North American region holds the largest market share in the world, which can be attributed to the large-scale use of RF tags in the retail and healthcare sectors. The region has showcased an increase in the high-volume shipments in the recent years, especially in the U.S., which is the largest demand zone for tags. The North America region is expected to grow at a healthy CAGR of 14.0% over the forecast period.
 
The Asia Pacific region is estimated to grow the fastest over the forecast period owing to the growing demand from developing countries, such as China and India. The presence of many manufacturers and OEMs in the region is also conducive to the region’s growth. The South American region is estimated to follow the Asia Pacific region in terms of growth in the coming years.