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How have the capabilities and cost of RFID tags evolved?

In the past, the cost of RFID tags has limited where RFID could be used. Today, lower prices and more advanced capabilities are starting to enable wider, more effective use.

What is the approximate price of the most popular types of RFID tags today, and what kinds of new capabilities...

are enabled by lower-priced RFID tags?

In the last ten years, RFID tag prices have plummeted. Focus on creating the "five-cent tag" has produced results. Chip prices are down to around three to four cents. However, end customers do not pay those low prices. There is a lot more to producing a tag -- antenna, packing and sometimes added features -- that make the tag usable and add to the cost.

At the same time, tags, as well as the software applications that surround them, have improved capabilities. That means the value proposition has grown. This presents a great opportunity for the enterprise to rethink RFID. We'll focus here on the passive tags, which is where most of the changes in pricing and capabilities are occurring.

RFID prices need to be considered in concert with deployment costs and years of service, or cost per use. Using RFID with a business application can provide users better visibility into the ROI of the RFID tags. Here are the basic types of tags and their potential use cases.

High-frequency RFID

The system infrastructure that comes with the tags is where the real cost and the real value are -- an ID card can be used for years, for example. Today's users buy these as integration systems, rather than just purchasing tags. Use cases include:

  • Access control: The old standard high-frequency (HF) RFID was usually mounted onto an ID card. It was used for decades and cost between a dollar to $3. Newer high-security access control may add a pin chip using near-field communication (NFC) technology, and cost between $4 to $10 per access card (although the chip itself will be less than a $1). This type of card can be used not only to access a facility, but to gain access to more secure areas and even log onto computers. The back-end software goes way beyond unlocking doors and may offer a full identity management suite.
  • Healthcare: Use cases are growing in hospital settings where security for medical cabinets, inventory control and patient experience applications is growing in importance.

Ultra high-frequency RFID

These tags can run from 20 cents up to $2, depending on the application and packaging. Possible applications include:

  • Item-level disposable UHF tags: Here is where the price-performance ratio has become more of a factor in the industry. The new Generation 2 chips have better range and more data capacity. UHF tags can range between 10 cents to several dollars, depending on the application.
  • Retail inventory management: These tags are used for locating goods in stock rooms and on the floor, price checks, etc. They can be hard-reusable tags that look much like the cheaper electronic article surveillance (EAS) tags consumers are used to seeing. Retailers reuse these and the cost per use goes down. Other retailers may use paper tags that can be thrown away. Goods  are often tagged before they arrive in the store, at the distribution center. This helps with accurate selection of goods.
  • Brand protection: Some tags are embedded discretely within an item and are used for brand authentication and protection from the manufacturing site. This may be what is called a dual-frequency tag, which has both HF and UHF. A more costly tag, but usually used on luxury goods.
  • Extra serialization: Gen 2  tags have chip serialization and may be used for extra serialization and item authentication. These types of tags are gaining traction in the pharmaceutical industry. Additional cryptography is available at an additional cost.

Fabric tags

UHF RFID chips can be sewn directly into garments. These replace the ubiquitous collar tags and can be used for brand authentication, pricing, branding and ticketing needs that an apparel manufacturer or retailer may have. These are usually about $1 to $2 for low volumes with steep discounts for volume sales. Luxury brand apparel manufactures, as well as high-value apparel, (uniforms for firemen, airline pilots, costumes, etc.) find great value in these tags.

Battery-assisted UHF

This is a small but growing area that allows for easier reading with products such as industrial equipment and airplanes, where finding and reading tags is traditionally more difficult. The battery enhances the read range and the memory is usually much larger, allowing tracing, authentication, service data, etc. to be recorded so it can accompany the good or product.

UHF and sensors

This is another small but growing market, and an early application of the Internet of Things. RFID technology can transmit sensor data that could help companies optimize manufacturing and supply chain processes.

Visual tagging

RFID can be combined with other technologies, such as an "e-paper" display with a battery-powered active UHF tag. These devices can incorporate LCD technology or alternatively, electrophoretic displays, enabling long battery life, due to the fact that they do not consume power while displaying. The bi-stable LCD display tag has about a six- to seven-year battery life. Visual tagging is not cheap, but the price per use could make it a more appealing option . Use cases include:

  • Allowing asset tracking, kanban and worker instructions to accompany products or equipment. These tags eliminate paper and help in hard-to-read environments. They also help with the ability to understand instructions and can be multilingual as well, which helps if you have an international workforce (which many manufacturing plants do).
  • Dynamic pricing in retail. Visual tagging can be used to manage price displays in retail, as the "e-paper" or "e-ink."

Pricing for RFID will probably stabilize for a few years. However, new innovations are always coming along, such as RFID on paper and printed electronics. Practical deployment of those new innovations is still years in the future.

Next Steps

How can companies use item-level RFID?

RFID is more than tags

The pros and cons of the Internet of Things

This was last published in January 2015

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