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RFID: A Market in Waiting?

The burgeoning number of methods for implementing enterprise RFID solutions continued to expand today with Nokia Corp. (NYSE: NOK)'s healthcare deployment for its near field communications (NFC) radio frequency tagging technology.

Based on a new short-range wireless specification, the NFC technology has been built into Nokia's 3220 mobile phone so that it can act as an RFID tag reader.

Despite the growing interest in RFID for a host of applications, however, the technology has yet to make the leap beyond its core vertical markets.

Finnish home health care firm Allévo is using the phone along with software from Nedap N.V. to centrally register, update and store information on the patients it visits. Allévo will provide every patient with a chip card when they first sign up to the service. At each subsequent visit, a nurse touches the patient's chip card using the Nokia phone to register thus eliminating the need to fill in forms and allowing the care giver access to the latest patient data.

The firm claims that the installation is the first of its kind in the healthcare market.

Nokia joins a growing list of big-name networking vendors plus a multitude of smaller vendors offering all -- or pieces -- of the RFID technology equation in various forms: card readers, tags, and data collection applications.

Cisco Systems Inc. (Nasdaq: CSCO) has so far focused on using wireless LAN as an enabler for tracking "high-value" items over an 802.11 network. (See Cisco: Location, Location....) Cisco bases its tracking solutions on the technology it acquired when it bought Airespace, and is working with RFID firms like AeroScout .(See Cisco Pushes RFID.)

Major rival Symbol Technologies Inc. (NYSE: SBL) has been working in the retail field for years and has a slew of its own offerings in the RFID market. The company also recently bought Matrics Inc. for $230 million, which gives it access to standards-based Electronic Product Code (EPC) technology. (See Symbol Spends $230M on RFID.)

Prediction about the potential size of the RFID market are bullish: Over 1.3 billion tags were produced in 2005, according to In-Stat , and by 2010 that figure will climb to 33 billion. Future markets include pharmaceuticals, livestock, and the military. Yet most of the RFID action continues to come from the initial vertical niches -- i.e., healthcare, retail, and shipping.

Massive retailers like Wal-Mart are making the running on the supply chain side; the superstore chain mandated last year that all of its top suppliers use the tiny radio tags for tracking goods.

Healthcare providers, meanwhile, are examining the technology with an eye towards maintaining patient records and tracking valuable assets on site. (See Marketplace Left to Define UWB.) RFID makes the most sense for enterprise users that have irretrievable high-priced assets that need to be accounted for at all times, and for which they can use an existing wireless network to track.

For instance, Delta Airlines is using WLAN for baggage tracking at the Hartsfield-Jackson Atlanta International Airport. But Lance Lyttle, CIO of the airport, told Unstrung recently that the airport installed the WLAN network as part of a long-term project to improve wireless coverage in its buildings. That seems to be the current state of the market: RFID, at least for the moment, seems to be an additional application that adds value once companies have new wireless infrastructure in place -- not the motivating factor to install the hardware.

— Dan Jones, Site Editor, Unstrung

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