Contact Center Solutions Industry News

[October 20, 2004]

Gartner Says Companies Should Focus on Business Benefits of RFID, Not 5-Cent Price Myth; Analysts Discuss Hype Surrounding Radio Frequency Identification at Gartner Symposium/ITxpo 2004

LAKE BUENA VISTA, Fla. --(Business Wire)-- Oct. 20, 2004 -- Radio frequency identification (RFID) has climbed from relative obscurity to become one of today's most discussed retail technologies, spurred by industry speculation that a 5-cent RFID tag will be available in the near future, according to Gartner, Inc.

"RFID technology holds exciting opportunities for almost every business," said Stephen Smith, research vice president at Gartner. "But rather than ask at what price does RFID become effective, retailers should identify if a specific business case exists for the technology in their business based on today's price."

Future trends for RFID in retailing were presented here during the Gartner Symposium/ITxpo 2004. The six-day conference runs through October 22.

"The use of RFID to capitalize on data flow in global supply chains could be one of the most significant developments in business strategy since companies first recognized the importance of information flow," said Mr. Smith. "This means we can expect tremendous change ahead for product-centric organizations."

Companies will go through a two-phase adoption of RFID. First will be the creation of RFID-enabled business processes, using RFID within the context of existing business processes and thereby achieving marginal benefits from it. The second phase will be when companies adopt RFID-centric business processes, involving a radical re-engineering of business processes.

"RFID technology and the business benefits it promises will not arrive with a big bang," said Mr. Smith. "High capital costs, imperfect read-rates, unproven systems and uncertainty around standards will all need to be addressed before retailers can adopt and benefit from the technology. This means that over the next 10 years, retailers will continue to use barcodes and gradually introduce RFID tagging, creating an environment of co-existence."

As for the 5-cent RFID tag myth, Mr. Smith said, "There are conflicting problems with assembling low-cost tags. One of the primary things vendors must do to reduce tag cost is reduce the size of the chip. However, reductions in the size of the chip make assembly more expensive. Currently, no vendor has been able to get out of this paradox."

Passive tags today cost from 40 cents to $10. Active tags usually start at $4 to $5, increasing to hundreds of dollars. By 2009, the most competitive RFID tags will cost 20 cents.

About Gartner Symposium/ITxpo

Gartner Symposium/ITxpo is the IT industry's largest and most strategic conference, providing business leaders with a look at the future of IT. For more than 10,000 IT professionals from the world's leading enterprises, Gartner's annual Symposium/ITxpo events are key components of their annual planning efforts. Attendees rely on Gartner Symposium/ITxpo to gain insight into how their organizations can use technology to address business challenges and improve operational efficiency.

In Orlando, an integral part of the Gartner Symposium is the ITxpo showfloor, where more than 190 technology companies are showcasing the latest technology solutions. There are 13 ITxpo marketplaces, including mobile and wireless, business intelligence and data warehousing, IT services, security and a compliance pavilion. ITxpo marketplaces are focused areas designed to aggregate solution providers into a specific market and link conference topics to market solutions. Attendees can attend technology company presentations and schedule face to face meetings with exhibitors of their choice.

About Gartner

Gartner, Inc. (NYSE: IT and ITB) is the leading provider of research and analysis on the global information technology industry. Gartner serves more than 10,000 clients, including chief information officers and other senior IT executives in corporations and government agencies, as well as technology companies and the investment community. The Company focuses on delivering objective, in-depth analysis and actionable advice to enable clients to make more informed business and technology decisions. The Company's businesses consist of Gartner Intelligence, research and events for IT professionals; Gartner Executive Programs, membership programs and peer networking services; and Gartner Consulting, customized engagements with a specific emphasis on outsourcing and IT management. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, and has more than 3,500 associates, including approximately 1,000 research analysts and consultants, in more than 75 locations worldwide. For more information, visit www.gartner.com.

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