Forecast: Retail Spending On RFID To Exceed $1 Billion By 2007

RFID (radio frequency identification) mandates by Wal-Mart and the U.S. Department of Defense will be a boon for makers of RFID services, hardware and software in the short term, a new forecast suggests. IDC, a Framingham, Mass.-based consulting firm, predicts that RFID spending for the U.S. retail supply chain will grow from $91.5 million in 2003 to nearly $1.3 billion in 2008 as manufacturers and distributors rush to get in compliance. IDC then predicts that spending will level off in preparation for what it says will be the next wave of RFID: item-level tagging. "RFID will be deployed in fits and bursts as manufacturers and retailers move along the learning curve and as tag and reader costs come down over the next several years," says IDC's Christopher Boone, program manager of U.S. vertical industry research. "Although many suppliers and distributors are currently unfamiliar with RFID technology, they will soon need to comply at some level with customer demands for RFID tagging of cases and pallets." The majority of dollars spent during the forecast period will be on hardware, says IDC, reaching $875 million in 2007.