RFID Technology - Trends in Asia Pacific - National RFID Centre

RFID Technology - Trends in Asia
Pacific
Parul Oswal, Industry Analyst
RFID & Security
17 th July 2009

Who We Are
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an extensive clientele that includes Global 1000 companies, emerging companies, and the
investment community.
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training, and support clients to help grow their businesses.
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Focus Points
1 Market Trends
2 Standards in Asia Pacific
3 Technology Trends
4 Value Chain & Competitive Factors
5 Summary
4

Market Drivers and Restraints
Rank Driver 1 - 2 Years 3 - 4 Years 5 - 7 Years
1 Strong government support High High Medium
2 Efforts toward standardization High High Medium
3 Expanding application segments High Medium Medium
4 Convergence of technologies Medium Medium High
5 Rising awareness levels Medium Medium High
Rank Restraint 1 - 2 Years 3 - 4 Years 5 - 7 Years
1 High Cost of RFID High High Medium
2 Integration issues at the backend
3 Hiccups from the current
recession
High Medium Medium
High Medium Low
4 Privacy and security concerns Medium Medium Low
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Asia Pacific RFID Market: Revenue Forecasts
Revenues ($ M illion)
3000.0
CAGR: 21.1%
40.0%
20.0%
Revenue Growth Rate
• Growing at a CAGR of 21.1
percent from 2008 to 2015
• Vendors are constantly
innovating new products to
survive the competition
0.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
0.0%
Year
Readers
23.6%
Middleware
12.0%
• RFID hardware (tags and
readers) accounted for 88.0
Tags
64.4%
percent of the market in 2008
•Middleware accounted for the
remaining 12.0 percent
Note: All figures are rounded; the base year is 2008.
Source: Frost & Sullivan
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Revenue Percentage Split by Technology
Semi-passive
tags
0.4%
Active Tags
10.1%
Hybrid Readers
7.8%
Active Readers
20.4%
Passive Tags
89.5%
Passive Readers
71.8%
Note: All figures are rounded; the base year is 2008. Source: Frost & Sullivan
• Passive tags are currently the largest, while semi- passive are expected to show high growth
rates during the forecast period at 70.9 percent, with negligible market share in 2008. Active tags
market will continue to increase at 45.8 percent during the forecast period.
• Passive readers in Asia Pacific comprise 71.8 percent of the market in 2008, with their demand
increasing throughout the forecast period, while active readers comprised 20.4 percent, and
hybrid market is still nascent, with limited usage contributing 7.8 percent in the base year.
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Vertical Market Trends
100.0%
Revenues (%)
0.0%
Note: All figures are rounded; the base year is
2008.Source: Frost & Sullivan
• Supply chain management is expected to have the highest revenue share in 2015, followed by the
more traditional security, access control, and asset tracking and transportation applications
• Security, access control, and asset tracking and transportation were the largest applications for RFID
in Asia Pacific in 2008.
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Supply Chain Management
Security, Asset Tracking, and Access Control
Healthcare
• By 2015, supply chain management is expected to become the largest application segment, while the
more traditional applications will hold a marginally lower market share.
Year
Transportation
Livestock
Others
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Expanding Application Segment
Oil & Gas
Mining
Jewellery
Liquor
Document/
Certificates
Bill Boards
CD/ DVD
Street Lamps
Prisoner Laundry Manhole
Flower
Sports Timing
Footballers
Casino Chips
Vending Machine
Source: Frost & Sullivan
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UHF Regulatory Status in Asia Pacific
Country Regulation Frequency Power Technique Comments Regulator
Australia In place 920 to 926 MHz 4 W eirp 4 W EIRP available
through license,
managed by GS1
Australia. Situation
likely to continue until
2007, when it is hoped
that a permanent
change to a limit of 4
W EIRP will take place
Australian Communications
and Media Authority (ACMA)
International Radiocommunications
Bangladesh NA Bangladesh
Telecommunication
Regulatory Commission
(BTRC)
Cambodia NA Ministry of Posts and
Telecommunications
China In place 840.5 to 844.5
MHz
920.5 to 924.5
MHz
2 W erp FHSS Available, since May
2007
2 W erp FHSS
Ministry of Information
Industry
Hong Kong In place 865 to 868 MHz
920-925 MHz
2 W erp
4 W eirp
Office of the
Telecommunications
Authority (OFTA) of the
Hong Kong special
administrative region
India In place 865 to 867 MHz 4 W erp Approved in May 2005 Telecom Regulatory
Authority of India (TRAI)
Source: Frost & Sullivan
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UHF Regulatory Status in Asia Pacific (Contd…)
Indonesia In Progress Band 923 to 925 MHz
being considered
Japan In place 952 to 954MHz 4 W eirp LBT License required for
using 952 to 954 MHz
at 4 W eirp
Directorate General of Posts
and Telecommunications
(Postel)
International Affairs
Department,
Telecommunications Bureau
Macau
NA
952 to 955MHz
LBT
4 W eirp LBT 952 to 955 MHz
available for unlicensed
use at 20 milliwatts eirp
Malaysia In place 866 to 869 MHz Allocation under
consideration. 868 MHz
available at 50
milliwatts
Malaysian Communications
and Multimedia Commission
(MCMC)
919 to 923 MHz 2 W erp Unlicensed use allowed
up to 2 W erp. Use up
to 4 W erp allowed
under license
Mongolia
NA
New Zealand In place 864 to 868 MHz 4 W eirp Ministry of Economic
Development
Pakistan
The
Philippines
NA
In Progress 918 to 920 MHz 0.5 W erp In progress Department of
Transportation and
Communications (DOTC)
Source: Frost & Sullivan
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UHF Regulatory Status in Asia Pacific (Contd…)
Singapore In place 866 to 869 MHz 0.5 W erp InfoComm Development
Authority (IDA) of Singapore
920 to 925 MHz 2 W erp
South Korea In place 908.5 to 910 MHz 4 W eirp LBT Approved in July 2004 Korea Communications
Commission
Taiwan In place 922 to 928 MHz 1 W erp FHSS Indoor Ministry of Information and
Communications (MIC)
922 to 928 MHz 0.5 W erp FHSS Outdoor
Thailand In place 920 to 925 MHz 4 W eirp FHSS New regulations
effective, since 20th
January 2006. License
required for power
above 0.5 W
National
Telecommunications
Commission (NTC)
Vietnam In place 866 to 869 MHz 0.5 W erp Ministry of Posts and
Telematics
920 to 925 MHz 2 W erp License required for
power above 0.5 W erp
Source: Frost & Sullivan
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RFID Tags Developments and Trends
Developments to Improve Quality and
Features for Tracking Everyday Items
Developments to Overcome
Uncertainty in ROI
Chipless RFID
Technology
Surface Acoustic
Waves (SAW)
Printable RFID
Technology
(Conductive Inks)
Polymer Based RFID
Chips
Miniaturization
(Powder Chips)
Sensory Tags
Strap Form Factors
Laminar Batteries
DNA Tags
Developments to Overcome
Privacy and Security Issues
Clipped Tags
Push Button Tags
Password Tags
Communication with
Other Technologies
(including Mobile Phones)
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RFID Reader Development and Trends
Intel Reader Chipset
Dense Reader Mode
Shift of Middleware to
Readers
• Expected to bring different
form factors since size
reductions to about half
• A high performance UHF
reader radio chip and highly
integrated.
• Cost reduction due to lower
design complexity. Increase
the reliability and enable a
range of UHF RFID
applications.
• Dense Reader Mode (DRM)
feature is found in most
industrial based readers. It
is a mode of operation that
can avoid readers from
interfering with other
readers when in close
proximity to one another. It
thus improves the overall
read rate accuracy.
• Introduction of intelligent
readers, will require parts of
middleware components will
be added into the reader.
This will indirectly reduce
the role of the middleware
based in centralized
locations.
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RFID Middleware Developments and Trends
Middleware Technology Trends
Secure sharing of information with advent of EPCIS
Better device management and scalability- ability to converge with sensors
and other input/ output devices- Intelligent Sensor Networks (ISN)
Intelligence moving towards the edge of the network to reduce data
processing at centralized locations
Enterprise Middleware Suites moving towards service oriented architecture (SOA)
Enables complex business logic leveraging on business intelligence
and analytics
• Consolidation in the middleware industry
• Very few pure middleware vendors, most
have it as part of their products, services
and implementation.
• Large companies focus on providing
enterprise-based solutions , embed RFID
solutions within their products.
Decline of pure
middleware vendors
• Companies are developing their own middleware
rather than relying on external parties.
• Even system integrators are also beginning to
develop their own middleware suites besides
offering the traditional services.
System integrators
developing own
middleware suites
Middleware
Market
Trends
Preference to leverage
on in-house talent to
develop middleware
Enterprise solution
companies offering RFID
enabled middleware
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RFID Market: Value Chain Analysis
IC
Manufact
urers
Supporting Infrastructure
Storage
and
servers
Back End
Networks
Inlay
manufa
cturers
Reader
chipset
manufa
cturer
Others
Smart label,
printer
manufacturer
Tag
Manufa
cturers
Reader
manufa
cturer
Middleware
developers
Front End
Auxiliary
Bodies &
services
System
integrators
End User
Source: Frost & Sullivan
• In most cases, end user will only interact with
the system integrator, but will know of the
existence of the products under the ‘front end’
category, where the product supplied by the
SI has the company brand clearly visible.
• Back end category, is where IC, inlay and
reader chipset manufacturers donot have
interaction with SIs. Only larger SIs which
have personnel with vast expertise may have
relationships with every segment in the RFID
value chain to ensure successful transfer of
knowledge
• Most companies in other segments of the
RFID value chain have relationships with the
immediate segments and only larger
companies may have professional
relationships with all segments
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RFID Competitive Factors
Ability to
Provide a
Unique
Solution
Portfolio of
Products
Offered
Features,
Functionalit
y and Ease
of Use
Relationshi
p and After
Sales
Support
Key Competitive Factors
Overall
Implementa
tion Cost
Ability to
Integrate
with
Backend
Systems
Technical
Features –
ReadRange
, Accuracy,
Reliability
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To Summarize
Present Market Conditions
RFID is expected to eventually have a huge impact on the daily lives of humans as it
becomes increasingly more ubiquitous supporting a myriad of applications. However,
RFID stakeholders need to overcome certain issues related to standards and managing
expectations regarding the true capabilities of RFID technology.
With the current economic downturn, companies need to tighten their budgets, and
strategically focus on areas with high potential, rather than focus on all the areas and
not witness any positive result. They need to specialize in niche areas in order to grow
and be recognized in the market.
The industry is expected to undergo consolidation owing to prolonged period of slow
sales prospects and tight credit, during the current crisis.
Companies need to be innovative so that they do not lose competitiveness in these
trying times. RFID-related companies are likely to re-evaluate the pricing of their
products and services to ensure traction for RFID deployments continues.
There is still high potential for newer applications to be developed, vendors need to
show uniqueness and innovation, providing appropriate solution to specific problem.
Future Market Conditions
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For Additional Information
Parul Oswal
Industry Analyst
RFID & Security
65- 6890 0974
parul.oswal@frost.com
Thank You
Lennon Tan
Strategic Account Manager
Industrial Practice – Asia Pacific
(65) 6890 0280
lennon.tan@frost.com
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