ABI Research of Oyster Bay, New York, this week published what it considers three key trends that will occur this year in RFID. The first is the continued significance of the US market despite increasing internationalization of RFID. ABI notes that a number of non-US companies -- namely Omron, Siemens, Rafsec, Sato, KSW Microtec, and Samsung -- have recently made efforts to begin grabbing US market share. (Most notable is probably Omron, the $5 billion Japanese sensors manufacturer, who in November announced that it would "invest $20 million worldwide over 2005 and 2006 as a first step in seizing a larger share of the U.S. and global radio frequency identification (RFID) market.") ABI Research's director of RFID and ubiquitous networks Erik Michielsen sees the international cross-pollinization bringing a more rounded perspective and healthy competition to the wider industry.

ABI's second prediction has to do with the oft-overlooked but absolutely essential component of the RFID ecosystem: the label converter. The company sees 2006 as a key decision-making year for the many label converters figuring out how to position themselves in RFID, which will eventually prove an important revenue source for them. (Label converters are the companies that take inlays from the likes of Alien, Rafsec, and Texas Instruments and add stock face, liner, plastic sheathing, adhesive, and whatever else necessary to make the inlay a usable tag. Typically end-users purchase RFID tags from label converters, not directly from the inlay manufacturer.) Label converters this year will make key strategic decisions around things like which verticals to target, be it consumer goods, cold chain, pharmaceutical, etc. Says ABI, "There are large market opportunities and niche opportunities, and how well these companies position themselves will have a great impact on their success."

Lastly, ABI sees standards body EPCglobal focusing its efforts on the reader and network level, which is "traditionally the territory of technology giants such as Microsoft, Oracle, SAP, BEA Systems, Sun Microsystems and IBM." How welcome EPCglobal's participation will be is a matter of debate, according to ABI. Some in the market perceive such participation as an overextension of the organization's mandate; others not. ABI itself thinks the jury is still out, saying it "has an open mind on the issue."