Is RFID a lost cause?

Posted on 27 June 2011

Near Field Communications (NFC) is a form of RFID that I’ve referenced several times in the past and is a continued ‘watch’ on my list of technologies of the future. Last week saw NFC get a significant boost through the formation of a joint venture between Everything Everywhere (which runs T-Mobile and Orange cellular networks in the UK), Telefonica (O²) and Vodafone. This joint venture says it will, “deliver the technology required for the speedy adoption of mobile wallet and payments”. You can read more about this here.

Mobile wallets, the ability to electronically pay for things by waving your mobile phone in front of a payment terminal, isn’t relevant to our Auto-ID world, or is it? There are many examples of hardware features appearing in the consumer mobile device which subsequently arrive in our more rugged enterprise focused mobile devices. Digital cameras are the most obvious example, and are frequently used in Proof of Delivery (PoD) applications to prove a delivery was attempted, usually by taking a picture of the front door. But it’s also true of GPS, Bluetooth, accelerometers and digital compasses, they’ve all appeared in rugged devices after the mass consumer market adoption brought down the cost of manufacture.
So how will the Auto-ID arena use NFC? The answer is in many ways. Unlike the much talked about, but little implemented, general Radio Frequency Identification (RFID) market, NFC will become mass market as consumers will be using the technology daily, forcing mass market adoption and therefore making the technology ubiquitous. We’ll see NFC’s introduction in applications as varied as; Asset Tracking to Security Guard Route checks, from Ticket Validation to Airline Check-in at airports… But wait a minute, wasn’t the same claimed for RFID back in the 90’s? Yes it was, so I feel I’d better explain why I think NFC will succeed where RFID has failed.

Both RFID and NFC depend on modulating and demodulating a radio frequency transmitted through an antenna and usually received via a hand-held reader. With NFC this device could simply be a mobile phone, but with RFID it’s often a separate hand-held gun type reader or a large add-on accessory to a rugged hand held terminal. The main barrier to adoption of any RFID application is cost. The RFID tags are expensive, depending on whether they incorporate a battery (active), or not (passive), they are unlikely to cost less than £0.15p and in some cases can be as much as several pounds per tag. Whilst the tag cost can quickly add up, each of the devices required to read or write to these tags cost several hundred pounds.

Now compare that scenario to NFC: The tags are likely to be passive and thus low cost, add to that the savings created through mass production, and the physical reduction in the size of read/write hardware to single integrated circuit chip form, the cost is minimal by comparison. If NFC chips fit within the existing, physically very small, mobile phone casing, the add-on cost for the manufacturer will be equally small. These chips will be made in the millions to fit within mobile phones from manufacturers including, Motorola, Nokia, Samsung, HTC and even Apple, and our Auto-ID manufacturers including Motorola, Intermec, Honeywell, Datalogic and Psion will incorporate the technology in their rugged devices soon.

The result should be the mass adoption of NFC in Auto-ID applications, because the main barrier to implementation has been removed – cost. NFC will succeed where RFID has failed because NFC will provide a speedy return on investment thanks to a much reduced capital cost from the off.

Do you think NFC will fill the gap which RFID failed to fill?
Will NFC evolve to replace current functional deployments of RFID?
Do you have a scenario where you could see NFC solving an issue which RFID has never fulfilled?

Feel free to leave a comment below. Or, alternatively if you’d like to discuss a possible deployment of a solution for your business, drop me an email or call the office on +44 (0)845 345 0808.