Venture capitalists and the investment community at large are upbeat about the imminent launch of the five-cent tag in 2008 in the world radio frequency identification (RFID) market. These tags will be a tremendous revenue-generator since they are expected to cover specific product lines that have high volumes, rather than being generic RFID tags.

New analysis from Frost & Sullivan (http://www.frost.com), World RFID Market – Investment Analysis and Growth Opportunities, reveals that this market earned revenues of $2.10 billion in 2005 and estimates it to nearly triple by 2008.

The RFID tags are likely to have limited initial applications, but will be deployed in large markets. For instance, Europe is expected to incorporate these tags only in the high-volume DVD/CD cases and drug markets at the outset. Also, the Food and Drug Administration’s (FDA) mandating the inclusion of RFID in the battle against counterfeit drugs will make the U.S. healthcare industry a happy hunting ground for the RFID investment community.

U.S. spending on RFID is likely to grow by 120 percent by fiscal year 2009, with applications such as postage stamps, smart tickets and bar codes being the primary users of five-cent tags. Industry experts expect the market for item-level tagging to exceed 500 billion by 2012, setting the stage for large-scale venture capital funding.

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