"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," said Christopher Boone, program manager, U.S. Vertical Industry research at IDC.
"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. Changes to business processes to take advantage of data from RFID tags should determine which enterprise applications will need to be modified, and ultimately how the RFID layer should be designed and deployed. Today, the RFID layer is driving the business decisions, and this is backwards."
RFID-related services will grow quickly at first, approaching $270 million in 2007, but growth will slow after 2005. Meanwhile, software spending will accelerate in the second half of the forecast period as the need for RFID middleware expands to more and more companies.