Cost fears restrain radio tag use

3 August 2005
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04 August 2005 | Anusha Bradley

High costs and a "lack of maturity" in radio frequency identification (RFID) technology is hampering its adoption, according to researchers.

A survey of 500 global companies by AMR Research has found around a quarter of companies are not yet testing the technology.

While 8 per cent use RFID throughout their firm, 18 per cent have no plans to use it at all.

Twenty-eight per cent said the technology was too expensive and would not result in a satisfactory return on investment.

And 29 per cent said it had not yet developed to meet their needs.

However, the findings suggest this reluctance may soon change, as 26 per cent of respondents intend to evaluate RFID and 12 per cent plan to pilot it this year.

Firms also revealed an intention to increase their annual RFID spend by 12 per cent to reach an average of almost £500,000 each by 2007.

But Dennis Gaughan, research director at AMR Research, said a 12 per cent increase over two years was not a "tremendous growth rate" and use of RFID is unlikely to take off until 2010.

Gaughan added that while two-thirds of companies were using or had plans to use RFID, many were only doing it because they are obliged to comply with their customers' own radio tag trials.

SMaug2005

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