Huge Growth for Asia Pacific Active Tags Market

Logistics Insight Asia, 1/1/2008

New analysis from Frost & Sullivan reveals the Asia Pacific active RFID tags market will be worth close to a billion dollars by 2013.

Although still in its infancy stage, the Asia Pacific active tags market holds considerable potential for growth. As this technology provides a platform toward seamless visibility of resources across the enterprise, more and more end users are beginning to adopt active tag technology in order to improve overall efficiency and increase overall security and safety ofresources.

New analysis from Frost & Sullivan reveals that the Asia Pacific active tags market, which earned revenues of just over US$23.1 million in 2006, is set to hit $906.0 million in 2013. Some of the verticals seeing active deployments include healthcare, manufacturing and logistics, transportation, and emerging markets such as personnel tracking and measurement of various environmental elements such as temperature and humidity.

“Active RFID systems are drawing greater interest from end-users due to their ability to provide greater visibility in location tracking compared to other existing methods,” notes Frost & Sullivan Research Associate Richard Sebastian. “Enterprises are increasingly beginning to realize that better resource management, which may include tracking of raw materials, work in progress (WIP), high valued assets or personnel is the key to greater efficiency and active tag technology is just the means toward achieving this.”

Quick ROI
Moreover, the adoption of active RFID, especially in closed loop systems, has shown a relatively quick realization of ROI for potential adopters, when compared to passive-based systems. While some end users begin to reap the ROI from six months onwards, most adopters begin seeing the ROI 12 to 24 months post deployment.

Governments across the Asia Pacific are also playing an important role in ensuring stronger adoption of active tag technology and considering the number of high-valued mobile assets under the various ministries, this sector holds lucrative opportunities for market participants.

However, the high cost of these systems remains a major barrier to their greater adoption, especially among the small and medium enterprises (SMEs).

“In addition to the price of readers and installation of additional access points, enterprises will also need to consider other expenditure such as software, system integration, and business process reengineering (BPR) costs,” says Sebastian. “Furthermore, enterprises are most likely to need upgrading of the networks and storage to cope with the volume of data captured by the RFID system.”

Going forward, the overall cost of RFID solutions is likely to drop at a rate of 5 to 20 percent annually, but it may still be a while before end users, especially from the SME category, are able to afford this technology.

In the mean time, active RFID vendors including tag manufacturers could form strategic partnerships with financial institutions and government ministries to provide some form of financial assistance to enterprises keen on embarking on this technology, says Frost & Sullivan.

Frost & Sullivan (www.frost.com) is aglobal growth consulting company.