Radio frequency identification technology isn’t going away any time soon. But some of the companies that sell the stuff might be. Even as uses for the digital barcodes and tracking chips proliferate, the radio frequency identification industry may be on the verge of a shakeup that could hit the Dallas area harder than others. Experts say that while consolidations, bankruptcies and mergers may sound traumatic, they would actually indicate the industry is maturing. And opportunities will continue to blossom for start-ups focused on new uses for the technology.

By all appearances, the industry seems to be growing faster. For example, 135 companies had exhibits at the RFID World conference in Grapevine, Texas, earlier this year compared with 80 last year in Denver, and the show floor at the Gaylord Texan Resort & Convention Center was crammed with more than 3,000 attendees. At the inaugural conference in Fort Lauderdale in 2003, there were about 400 attendees.

Many of the new firms, both in Dallas and nationwide, sprang up to cater to companies trying to meet Wal-Mart Stores Inc.’s RFID mandate. Wal-Mart has already required its largest suppliers to start using radio frequency technology, and is now pushing its smaller suppliers to adopt it as well. While many suppliers simply did the bare minimum to comply initially, they now hope to use radio frequency tags and readers to help their own supply chains operate as efficiently as Wal-Mart’s.

As a result, the less sophisticated start-up radio frequency firms that just stick tags on boxes without helping a company overhaul its supply chain are going to see demand decline. Compliance mandates from companies such as Wal-Mart and agencies such as the Defense Department are still driving most of the demand for radio frequency products and services. But over the next two years, most of the affected companies will be in compliance and will start using RFID technologies internally. The potential return on investment will be too big for them to ignore.

But even as the industry matures new uses will pop up, creating new opportunities for start-up firms. It is also expected that new companies perfecting battery technology for some of the more powerful RFID tags, as well as more software firms creating programs to help companies integrate their radio frequency data with the rest of their infrastructure.

| Permanent Link | Print This eLog |

(Visited over 19427 times)