21 January 2004

RFID technology spreading fast

By Jim Pinto

Radio frequency identification for business (RFID) was invented in 1969, but is only now becoming commercially and technologically viable.

RFID tags are microchips that you can embed in almost anything to give it a unique ID code. An RFID tag acts as a transponder (transmitter/responder), responding to queries from a nearby transceiver by transmitting back its own unique 64-bit or 128-bit identifier. This yields about 18 thousand trillion possible values, each virtually impossible to erase without destroying the tag.

Some RFID tags get their power from batteries—but that makes them more bulky and expensive, limiting their applications only to larger, more expensive equipment. The most widely used RFID tags are passive circuits, powered directly by the received radio signal. Mainly, they should be read between a few inches and a few feet away, depending on the size of the antenna and the power and sensitivity of the transceivers.

RFID chips cost about 50 cents each, but prices are dropping as quantities increase. Once they get to 5 cents each, it will be cost efficient to put RFID tags in almost anything.

Today, retail businesses have adopted passive printed barcodes. Wal-Mart drove the spread of barcodes and is now a primary force behind the spread of RFID. The world's largest retailer is already starting to install "smart shelves," with networked RFID readers. Most businesses, and retailers especially, are moving very quickly into widespread adoption. Gillette said it is buying 500 million RFID tags, to ship with each package of razor blades.

RFID applications

Within a relatively short time frame, everything priced more than about $1 will carry an RFID tag. There are even washable RFID tags that you can sew into clothing.

Unlike bar codes, which are passive printed codes, the privacy threat comes when RFID tags remain active once you leave a store. That's the scenario that should raise alarms; currently the RFID industry seems to be giving mixed signals about whether the tags will be disabled or left enabled by default.

Banks are considering embedding RFID tags into banknotes, to eliminate counterfeiting—it's easy to check that the RFID matches the printed serial number. But then, privacy groups are alarmed that anybody with an RFID reader could count the money in wallets of passersby.

Widespread use of RFID tags raises the possibility of people being tracked though personal possessions. The implications are startling: Purchases can be linked to the credit cards that were used to make specific purchases, which allows links to specific advertising based on personal spending patterns. The scenarios are similar to the movie Minority Report, where police surveillance tracked individuals any time, anywhere.

Related links:

• RFID Journal – Good source of RFID information
• Internet Week: Getting ready for RFID
• The RFID Imperative

Behind the byline

Jim Pinto is an industry analyst and founder of San Diego–based Action Instruments. You can e-mail him at jim@jimpinto.com or view his writings at www.JimPinto.com. Read excerpts from his new book, Automation Unplugged at www.jimpinto.com/writings/unplugged.html.