The market is being hit hard right now. Over the past 2 quarters, we have seen market contractions, RFID budgets reduced, pilots/evaluations paused or terminated, and a multitude of ‘belt tightening’ (i.e.: reductions in force, R&D, and marketing) activities across most verticals and applications. 

All communities – supplier, channel, and end user – are expecting a rough year, and the consensus is that the market will begin to show signs of a turnaround in the fourth quarter of this year, with a rebound occurring at least two quarters (minimum) after the recession ends (end of H1 2010). 

Based on preliminary estimates, the 2008 RFID market approached $4 billion, growing approximately 35% from 2007. We are happy to report that this growth is more than what was expected; however the recession did not begin to hit balance sheets until October, which would not have a dramatic influence on the 2008 annual figures. 

Our estimates for 2009 indicate that the market will grow – not contract - at a much slower rate. 

We estimate the 2009 market for RFID (all hardware, software, and services) to exceed $4.4 billion, an 11% growth rate over 2008. 

VDC Research forecasts for the industry over the next 5 years indicate that the market will gradually return to its previous growth rates (~28%) by 2012.

End users are indicating that their RFID budgets have been drastically reduced. For example, out of the 107 respondents from our first (3-5 in total) email campaign (68% of which are evaluating RFID and 32% are currently using it), 85 stated that their RFID budgets have been reduced by at least 60%. The budgets for those evaluating RFID were reduced by at least 70%, while those currently using the technology had budgets decreased by approximately 30%.