Will the Impinj R500 Reduce RFID Reader Cost?
Since we were discussing RFID economics last week, I thought it only made sense to highlight a little noticed announcement out of Impinj last week. On July 29th Impinj announced the introduction of a new, lower cost reader chip, the Indy R500. Chips are RFID reader components and have a direct impact on the cost and performance of reader modules as well as full feature fixed and handheld readers.
Impinj suggests that the R500 will be suitable for many tasks that do not require long read range or the need to read many items at once. Conversations with the company confirmed that The Indy R500 is priced at approximately 50% of the R2000 and more than 30% less than the now mid-range R1000 offering.
Calculating the RFID Price Savings
So what does this mean to end users? Are we looking at 50% drop in reader pricing? Not yet. Here’s the math one industry insider walked me through. Start with the knowledge that the R500 will only be suitable for your low end readers which include low performance fixed readers and modules. In a module, the reader chip can exceed 30% of the total bill of material cost. Reducing that cost by 30-50% with the new R500 can cut 10-15% out of the total price for low end RFID readers.
Less Functionality for lower RFID Reader Cost
This is a good trade-off for end users and RFID reader manufacturers. There are many applications that simply do not require the performance of a full featured RFID reader. Impinj confirms what ODIN has also seen in the market. More and more use case specific applications are leveraging embedded RFID. These are applications where RFID is simply part of a larger system. Many of these applications have the potential for very large scale deployments. When users are looking to install a dozen read points, the reader cost may not be a big deal. For embedded RFID applications that include 10,000 units, the impact is substantial. This is also why a specific RFID Operating System is required to replace expansive and cumbersome middleware.
The $50 RFID Reader?
While this is not an advent of the $50 RFID reader, it is another step in the right direction. You won’t see the price change immediately. It will take time to bring new readers to market that can leverage the R500. However, the timing is excellent and credit Impinj for a good example of favorable RFID economic trends.