WELLESLEY, MA--(Marketwired - October 20, 2016) - For most organizations, incorporating radio frequency identification (RFID) into their businesses involves more than simply inserting a new technology into existent business practices. BCC Research reveals in its new report that organizations are changing their underlying business processes and even their strategies, both of which are driving the need for specialized RFID integration services.
RFID is a technology that uses radio frequency waves to exchange data between a reader and a movable object in order to locate, identify or track the object.
The global market for RFID technologies should reach $16.2 billion and $38 billion in 2016 and 2021, respectively, demonstrating a five-year compound annual growth rate (CAGR) of 18.6%. Tags, readers, and other hardware as a segment should reach $27.5 billion by 2021, up from $12.1 billion in 2016, reflecting a five-year CAGR of 17.9%. As a segment, software and integration services should reach $4.1 billion and $10.5 billion in 2016 and 2021, respectively, at a five-year CAGR of 20.6%.
Tags, readers and other hardware accounted for the bulk ($10.5 billion, or 75%) of the global RFID market in 2015. Hardware expenditures are growing slower than software and integration services due in part to declining tag costs. As a result, hardware is expected to represent a smaller share (72.4%) of the RFID market by 2021.
North America was the largest geographical market for RFID in 2015, with 35% of total sales, followed by Asia-Pacific at 30%. The percentage share of North America should decline to 29.1% by 2021. Asia-Pacific and other markets should gain market share at the expense of North America and Europe. Asia-Pacific should be the largest geographical market by 2021.
By 2021, consumers as an end-user segment should replace transportation and logistics as the largest end-user segment with 22.7% of the market, up from 16.7% in 2015. The market share of transportation and logistics should fall to 17.4% by 2021 from 27.4% in 2015. Retail and personal services should increase its 2015 market share by 1.5%, reaching 17% by 2021.
For some manufacturers, as supply-chain-based RFID tags, readers, software and EPC guidelines rapidly adapt to meet large retailer mandates, tying together increasingly complex solutions can pose integration challenges.
"For example, the integration of tags sensors into tags significantly increases the cost and complexity of the tags. Moreover, while many tag operations can be powered using the electromagnetic energy from a reader, this approach is not workable for sensors, which must rely on battery power," says BCC Research analyst Andrew McWilliams. "Tags integrated with sensors are typically used with high-value, environmentally sensitive, or perishable objects whose value makes them worth the additional expense."
RFID: Technology, Applications, and Global Markets (IAS020D) analyzes the size and dynamics of the global market for products and applications. The report also examines new RFID technologies and new applications, including those anticipated to commercialize during the forecast period. Global market drivers and trends, with data from 2015, estimates for 2016, and projections of CAGRs through 2021 also are provided.
About BCC Research
BCC Research is a publisher of market research reports that provide organizations with intelligence to drive smart business decisions. By partnering with industry experts worldwide, BCC Research provides unbiased measurements and assessments of global markets covering major industrial and technology sectors, including emerging markets. Founded in 1971, BCC Research is a unit of Eli Global, LLC. For more information about BCC Research, please visit bccresearch.com. Follow BCC Research on Twitter at @BCCResearch.