RFID Technology and The Future

Currently, RFID technology is still too expensive to be used by retailers en masse. The cost per electronic tag now stands at about 30 cents apiece, but is expected to fall to as little as three cents in the next three years. RFID tags will probably not become pervasive until the per chip cost dips below one penny. Retailers will still have to purchase sensors to read the tags, which can cost $1,000 each.

In spite of the costs, some retailers are willing to pay the price for the insight RFID tags provide into the lives of consumers. Over the next few years, industry experts expect to see a broad range of RFID pilots, and even several fully integrated systems, launched. A handful of corporations have already signed on, and are moving ahead with plans to embed products with RFID tags. Recently, Microsoft Corporation announced that it would develop software that will enable retailers, manufacturers, and distributors to use RFID tags to track goods within stores and factories, as well as programs specifically designed to use the new retail tagging technology.

Other proposed uses of RFID technology include:

Tracking apparel: Clothing maker Benetton planned to embed retail items with RFID tags. The implanted devices would enable Benetton to track individuals and inventory their belongings by linking a consumer's name and credit card information with the serial number in an item of clothing. Privacy advocates noted the potential abuses of a system, and Benetton agreed not to tag clothing with tracking devices—for now.

However, Marks & Spencer, one of the largest retailers in the UK, announced that it will begin tagging apparel items with ultra high frequency (UHF) tags beginning in Fall, 2003. UHF tags are a new generation of RFID technology that provide faster data transfer speeds and longer read ranges. Marks & Spencer has already used tracking devices extensively in its food supply division.

Tracking consumer packaged goods (CPGs): Gillette, Wal-Mart, and the U.K.-based supermarket chain Tesco are teaming up to test specially designed shelves that allow for real-time tracking of inventory levels. The "smart shelves" will be able to read radio frequency waves emitted by microchips embedded in millions of shavers and other products. Wal-Mart plans to test the Gillette shelf initially in a store located in Brockton, Mass.

If the technology is successful, Wal-Mart also plans to join forces with Procter & Gamble to test a similar system with cosmetic products, and has encouraged its top 100 suppliers to use wireless inventory tracking equipment by 2005. So far, Wal-Mart executives say the company plans to use RFID chips only to track merchandise, and will remove the tags from items that have been purchased. However, Wal-Mart's decision to implement RFID technology will likely propel the ubiquity of the tags in CPGs.

Tracking tires: Tire manufacturer Michelin recently began fleet testing of a radio frequency tire identification system for passenger and light truck tires. The RFID transponder is manufactured into the tire and stores tire identification information, which can be associated with the vehicle identification number (VIN). Critics argue the tags could ultimately become tracking devices that can tell where and when a vehicle is traveling.

Tracking currency: The European Central Bank is moving forward with plans to embed RFID tags as thin as a human hair into the fibers of Euro bank notes by 2005, in spite of consumer protests. The tags would allow currency to record information about each transaction in which it is passed. Governments and law enforcement agencies hail the technology as a means of preventing money-laundering, black-market transactions, and even bribery demands for unmarked bills. However, consumers fear that the technology will eliminate the anonymity that cash affords.

Tracking patients and personnel: Alexandra Hospital in Singapore recently began a new tracking system in its accident and emergency (A&E ) department in the wake of the Severe Acute Respiratory Syndrome (SARS) scare. Under this system, all patients, visitors, and staff entering the hospital are issued a card embedded with an RFID chip. The card is read by sensors installed in the ceiling, which record exactly when a person enters and leaves the department. The information is stored in a computer for 21 days. Officials say that the technology enables health care workers to keep tabs on everyone who enters the A&E department, so that if anyone is later diagnosed with SARS, a record of all other individuals with whom that person has been in contact can be immediately determined. Other hospitals in Singapore are expected to adopt similar technology.

Payment systems: In 1997, ExxonMobil developed the wireless payment application known as Speedpass. Since then, six million consumers have utilized the payment option at 7,500 Speedpass-enabled locations. Now, a wide range of merchants and retailers are looking for ways to implement radio frequency (RF) wireless payment systems. Sony and Phillips are leading the way. The two corporations will soon begin field testing an RFID system called Near Field Communication (NFC), which will enable RFID communication between PCs, handheld computers, and other electronic devices.

The companies envision that consumers will log on to their personal online portal by swiping their smart cart—embedded with a Sony or Philips RFID—which will be read by a RFID reader plugged into the USB port on the computer. Next, consumers would shop online, say, for tickets to a local event. The consumer would pay for the tickets online, download them to their PC and then transmit them with NFC technology to an RFID tag in theirmobile phone. Then, at the event, consumers would wave their cell phone near a reader in the turnstile, and be automatically admitted.

Information provided by http://www.epic.org/privacy/rfid/