Research firm Gartner today announced the release of its inaugural RFID market size, share, and forecast report Market Share and Forecast: Radio Frequency Identification, Worldwide, 2004-2010. The key prediction is that the RFID market will grow from $504 million this year to $3 billion in 2010. RFID Update spoke with Jeff Woods, research vice president at Gartner, about the findings.

"The industry is starting to come out of the trough of disillusionment," said Woods, referring to a phase in Gartner's famed "Hype Cycle" model that tracks the adoption of emerging technologies. It means that after the RFID hype over-heated earlier this year, the industry slumped as optimism turned to skepticism about the technology and its benefits. Now the tide is starting to turn, believes Woods, but there still needs to be a demonstration of meaningful results about values gained from existing deployments. "What we really need is positive deployments," he said. "We need people who are announcing large projects with substantial benefits as opposed to just decisions to deploy."

Gartner predicts that such benefits are being realized and that the industry will start hearing about successful, innovative applications of the technology. This in turn will accelerate adoption, which Gartner sees happening in late 2006 and 2007 when hardware and software spending increases. "As the innovators' trials become public, broader deployments across emerging sectors ... will become evident in 2006 and 2007," according to Woods. Furthermore, the industries in which RFID is deployed will continue to diversify, expanding what many believe has been a myopic focus on CPG and retail. Aerospace and defense, healthcare, logistics, and pharmaceuticals are all ripe for adoption. In each of these industries, adoption will occur in different ways. The pace of adoption will also vary as vertical applications are discovered from industry to industry.

According to the report, RFID is best not thought of as a suped-up bar code and indeed is best suited for areas where bar codes are not used. Said Woods, "RFID tags will be used for data collection of mobile assets and in largely chaotic or unstructured business processes, ranging from retail environments to hospitals, enabling these environments that lack sophisticated process engineering or controls to be systematically managed."