New Technology Ventures A report on Market Feasibility Study on RFID and Baggage Handling
Bala Krishnan Simon Longbottom
(This report contains 25 pages in total)
Daniele Quercia John Strafford
New Technology Ventures RFID and Baggage Security
CONTENTS
INTRODUCTION
4
What is RFID?
4
History of RFID and adoption
4
Why is RFID exciting?
6
How does RFID work?
8
RFID technology advantages over barcode
9
Applications
10
Technology showstoppers? What factors might limit adoption? Tag Reading Tag Manufacturing Cost
12 12 13
Is the timing right from a technology perspective?
13
THE RFID MARKET
14
Market Size & Growth
14
Macro-trends Socio-cultural trends Technological trends Regulatory trends
14 14 14 15
Market segments
15
RFID baggage handling submarket analysis Baggage handling segment growth IATA contribution towards standardization
15 15 16
THE BAGGAGE HANDLING INDUSTRY
18
Introduction
18
The major players
18
Competitive environment for RFID baggage handling solutions
1
Industry Summary
1
Is the timing right from the industry perspective? What is happening?
1
Current projects for RFID handling systems
1
2
New Technology Ventures RFID and Baggage Security
Appendix 1
3
Appendix 2
5
Key players
5
3
New Technology Ventures RFID and Baggage Security
INTRODUCTION What is RFID? RFID stands for Radio Frequency Identification. Quite simply it describes the method by which a subject can identify itself, on request, by the transmission of identification information through the medium of radio waves. The subject can be either •
Animate: such as Humans, Dogs or farm animals etc, OR
•
Inanimate: packaged foods, cars, or consumer goods
History of RFID and adoption RFID was first discovered and used in the Second World War to allow the British to differentiate between friendly and enemy airplanes. The British warplanes were fitted with a transponder that woke up when a British Radar signal was detected and then transmitted a friendly signal back towards the source, indicating that the plane was friendly. Though invented in wartime, in more peaceful times RFID research and development has been driven forward by the promises of significant cost reduction and a multitude of exciting value added services. In its early commercial manifestations each item to be tagged had a small electronic assembly (a transponder) fitted to it that would respond with a burst of radio frequency (RF) carrier modulated identification data when interrogated by a RF signal (on a different frequency) from either a hand-held scanner/reader, or one mounted, say, in a doorway. This burst of identifying data was intercepted by the scanner, decoded and used to both identify the tagged item and for it to be counted. The early RFID tagging means were battery powered (so called active devices). These were not only costly, but also relatively bulky. Since then RFID use, and potential, has greatly increased in large part due to the unit cost, size and power needs, of the essential ‘tag’ having decreased by many orders. Despite the duration of its history RFID technology is still in its application formative years. Chart 1 gives a sample overview of the development of RFID applications with time, and some of the major activities that have lead to the current rapid uptake of the technology.
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New Technology Ventures RFID and Baggage Security
In many applications RFID tags replace barcodes, which have proven excellent for tracking products through checkpoints for more than forty years (i.e. at the point of sale on the way out of the supermarket for instance). However, the humble barcode suffers from a number of drawbacks. More specifically barcodes •
are limited to the data printed on them and cannot be updated, other than by replacement or sticking a label over them (which may be labour intensive).
•
need to be substantially flat for reliable reading.
•
are typically (but not always) paper labels, or printed on paper based packaging, and therefore prone to damage.
•
typically provide inventory data to the level of product category.
•
are very unlikely to show through which distribution depots and transport means the product arrived at the point of sale.
As will be seen later in this paper, RFID technology overcomes the limitations of barcodes. But as with barcodes, to gain wide international acceptance as the preferred means for
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New Technology Ventures RFID and Baggage Security
inventory control systems there will have to be open standards for their use. Further if RFID technology is to become as ubiquitous as barcodes in the distribution chain, then the unit cost of the ‘tag’ will need to be substantially as cheap as the printed barcodes. Arguably, an RFID tag may never become as cheap as the printed barcode incorporated on the ‘cereal box packaging’, but because of RFID’s advantages they may become the preferred inventory control means for consumer durables, and high value capital goods etc. Why is RFID exciting? RFID addresses and resolves all of the limitations highlighted above and with fantastic prospects for further technology development offers a multitude of new and exciting applications. Imagine for instance your clothes containing miniature RFID tags that when placed in the washing machine, could tell the product how best to wash and care for it. Or forget reading the instructions on the back of a microwave ready meal, with RFID tags on the packaging the microwave could just read and follow the instructions automatically, only informing you when you need to take action. These are just two of the value added services that might enrich the world through the adoption of cheap RFID technology. So, where is RFID on Gartner’s Hype Curve in 2005?
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New Technology Ventures RFID and Baggage Security
This figure shows that Gartner believe RFID to be 5 to 10 years from mainstream adoption. However, by this placement, it would seem that RFID is on the verge of emerging from the hype surrounding the technology and starting to deliver on some of its extravagant claims. To understand this reasoning, it is necessary to fully examine the current status of RFID development.
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