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From RFID to the 'Internet of things'

Eye-catching, illuminated beverage containers are just one of many smart and interactive technologies described in our Smart Packaging feature in this issue (page 22). While these smart techniques are fun and exciting, most smart-label attention today zeroes in on radio frequency identification.

The U.S. smart-label industry, which includes electronic article surveillance (EAS), RFID and interactive packaging labels, is currently dominated by anti-theft EAS tags. However, starting in 2004, a number of industry mandates—most notably from Wal-Mart and the Department of Defense—forced consumer goods companies to utilize RFID labels on pallet and case loads. Despite the cost of RFID labels, companies had no choice but to comply. The increased use of RFID labels, in turn, allowed economies of scale to bring down costs on RFID tags, which serve as the brains of these smart labels. Standardization, along with improved manufacturing technologies, will continue to drive down the costs of RFID labels. By 2014, RFID labels, which were about 10 percent of total smart-label demand in 2004, will account for more than 85 percent of the market, while the share of EAS labels will drop sharply, according to a new study from The Freedonia Group (www.freedoniagroup.com).

Smart Labels reports that RFID labels provide several significant improvements over bar codes in identifying objects, with information storage capacity, interfacing with computer systems and non-line-of-sight reading among the most important. As a result, according to the study, many observers are predicting that the widespread deployment of RFID labels will lead to what is known as the "Internet of things." This massively connected network, or group of networks, will enable computers to automatically recognize and identify everyday objects, and then track, trace, monitor, trigger events and perform actions on those objects. At its most ambitious, the Internet of things will create communication and interoperability among virtually all products and individuals.

IDTechEx (www.idtechex.com) has also extensively researched the RFID industry to highlight new trends and forecasts. According to a new report, RFID Forecasts, Players and Opportunities 2006-2016, 600 million tags were sold in 2005 at a cost of $1.2 billion and a total RFID cost (including tags, readers, services, etc.) of $1.85 billion. The report claims that challenges, such as tag yield versus cost, will be resolved to grow the RFID market to almost ten times its 2006 value within the next ten years. The number of tags delivered in 2016, however, will be more than 450 times the number sold this year. More on the IDTechEx study is available as our web exclusive this month at www.packagingdigest.com/info/RFID0206. More white papers on the topic, as well as many other packaging-related topics, are available through a link on our home page, or directly at www.packagingdigest.com/whitepapers.

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