The last few days have not been kind to radio frequency identification (RFID).
ABI Research reported today that Wi-Fi is “muscling in on RFID’s location-based services markets,” predicting that the market for Wi-Fi as a real-time location services (RTLS) provider will grow by more than 1300% over the next five years. That forecast came just four days after the managing director of Heavey RF, an Irish firm, issued his own report calling RFID “potentially one of the biggest technical blunders in history.”
The Heavey RF report says that RFID has a place in the market but will never fully live up to its hype because it is less reliable and cost effective than bar-coding. If you agree, that opens the door for a new technology in the RTLS market. Enter Wi-Fi, whose revenues in the market will increase from $59 million this year to $839 million in 2012, according to New York-based ABI.
“In the past, companies wishing to deploy RTLS had to buy proprietary RFID systems, inlcuding very expensive readers,” said Stan Schatt, ABI’s vice president and research director, in a statement. “But there is now such a large installed base of Wi-Fi equipment worldwide that Wi-Fi-based RTLS becomes cost effective for companies that had never considered it before.”
ABI recommends that vendors — including market leader Cisco and main competitors Aruba and Trapeze — work with channel partners who have RTLS experience to best take advantage of this new opportunity.
“It is a sophisticated solution that requires a knowledgeable reseller,” Schatt said.
ABI pointed out several benefits of Wi-Fi RTLS over RFID: Users that already have wireless networks don’t need to install extra cabling, and it utilizes specialized software to maximize its effectiveness. But there are also some problems with Wi-Fi RTLS compared to RFID, according to ABI: It’s “somewhat less accurate,” less secure and requires more wireless access points.