What do RFID Tags Cost?
Up until this year, RFID tag cost was our most frequent inquiry from end users. While it has now slipped behind questions related to tag performance and RFID software, it is still among the most requested information. Today ODIN released its second annual RFID Tag Pricing Guide™ and it's a free download.
Published RFID Tag Costs Unchanged in 2010...mostly
If you automatically expect tag prices to fall every year you may be surprised that 2010 was a remarkable year of price stability. Label tags common among suppliers to Walmart and the U.S. Department of Defense were virtually unchanged across our the vendors surveyed (see table). Specialty RFID tags by contrast saw some published price increases despite the fact that rabid discounting has caused actual tag costs for many of these metal mount tags to fall.
|Qty||Low||High||Average 2010||Average 2009||Trend
||↔ No Change
Some tag price examples from the RFID Tag Pricing Guide are included in the table above. You can see how small quantities of label tags actually fell by a small factor while a mid-range order of 100,000 tags remained unchanged. Pricing changes for 1 million quantity orders is included in the guide which is free to our readers. It also includes details on specialty metal mount tag pricing trends.
The Recession and Increased RFID Tag Demand
A number of factors influenced RFID tag pricing in 2010 but the most notable were the impacts of the recession and increased demand.
The recessionary environment in 2008-2009 led many companies to cut back on capacity for tag conversion and even upstream for tag silicon production. As demand for tags came back and global demand for silicon chips grew faster than expected, there were two forces moving tag supply toward scarcity. This led to significant RFID tag supply chain shipment delays and capacity constraints as reported in our August blog.
Demand growth for RFID tags was driven in part by Walmart's apparel tagging initiative. This program alone increased the expected RFID tag growth rate for the industry by at least 3x. To compound matters, tag demand growth exceeded manufacturer expectations in other sectors ranging from IT assets to orthopedic implants. We saw similar demand in RFID Software and readers.
The increase in demand and shortages of key tag components conspired to sustain year over year tag prices. The changes in actual prices paid since 2009 are statistically insignificant with the exception of small form factor metal mount tags which actually saw significant price declines in 2010.
Implications for 2011 Tag Pricing
The one thing that seems clear is that most tag producers expect 2010 to be a record year in terms of unit volume and revenue. We see this as a good sign that the industry is hitting profitability and an indicator that RFID tag producers are likely to get aggressive in tag pricing again in 2011 as they try to build market share.
The 2010 RFID Tag Pricing Guide™ focuses on UHF passive RFID tag cost. To read the full discussion download the 13 page report.
If you have any questions about RFID software, RFID readers, or Learning about RFID drop us a line.
Also, join the discussion and leave a comment. Did you experience tag shipment delays this year? Did you see tag prices drop, hold steady or increase in 2010?