The Evolution of RFID Networks

Executive Summary RFID technology has generated much hype in the last few years. The major driver for its development has been the tagging of physical objects – people, places, and things – with single chip radios so they can interface with computers. While the technology has been available for several decades, the 21st century has marked the beginning of a new era in RFID development and usage. The efforts of EPCglobal have dominated RFID application growth, creating a global infrastructure that is focused on improving supply chain management. Its supporters, including big players like Wal-Mart in the U.S. and Metro in Europe, treat RFID as a technology that will sustain their market power through incremental innovation. However, the scope and style of RFID technology extends far beyond this key initiative. This paper examines several key trends in the latest phase in RFID's history. First is the evolution of standards for the various components of an RFID system including the transmission technology (the " RF " part) and unique identifiers (the " ID " part). Efforts to standardize the various components of an RFID system are leading towards interoperable RFID technology and applications. Key initiatives include ISO standards and the EPCglobal Network. Second, while dedicated RFID systems will continue to develop, we will see more RFID applications exploit the growing base of short-range radio-based communication networks like Bluetooth and WiFi that have thus far evolved independently of RFID technology. More intelligent – and more expensive – active RFID chips are required for these types of applications (compared to the envisioned 5¢ EPC passive tag for example), but they involve far fewer objects than the supply chain and enable richer and higher revenue-per-transaction services. Third, despite the important advantages RFID offers over light-based systems, there are cases where some of the newer optical tagging systems could compete with RFID. This is particularly true for consumer-oriented applications involving mobile phone readers where cost and ease of use factors outweigh RF's performance advantages. Lastly, both RFID and other tagging technologies are making their way to the edges of the network and into the hands of end-users, significantly increasing the potential for disruptive rather than incremental innovation. We anticipate the development of grassroots projects that would provide a counterbalance to more centralized efforts such as EPCglobal.