As demand increases in the three years to 2017, RFID designs are expected to standardize, further accelerating decreases in price
Los Angeles, CA (PRWEB) September 21, 2014
Radio frequency identification (RFID) devices have a buyer power score of 4.3, reflecting buyers' significant advantage when negotiating supply arrangements. Extremely favorable pricing trends and low market risks contribute to the higher score, although high switching costs offset buyer negotiating power. In the three years to 2014, prices for RFID devices have fallen significantly. Suppliers are constantly finding ways to improve the manufacturing process. As demand increases, suppliers will be able to manufacture RFID devices in larger volumes, enabling them to gain economies of scale and cut down prices. Competition is also expected to increase as suppliers enter the market. Increased competition will increase pressure on suppliers to lower prices. “These trends will push prices to fall even further in the three years to 2017, which buyers can take advantage of by delaying their purchases if possible,” according to IBISWorld business research analyst Andrew Yang.
Low market risks also increase buyer negotiating power. The main components used to manufacture RFID devices, semiconductors and electronic components, are widely available all over the world. In addition, prices for both inputs are expected to fall, which will cut down production costs for suppliers. As such, supply chain risks are fairly low. “Vendor financials are also fairly positive, though buyers should take care with smaller suppliers,” says Yang. Low market risks indicate that buyers can expect a steady supply of RFID products from their suppliers and can be confident in forming long-term relationships.
The market structure has both positive and negative consequences for buyer power. Switching costs are high, indicating that buyers may be at risk of getting locked in with a supplier. To switch suppliers, buyers must buy many additional products and possibly change how they perform their operations. However, buyers do benefit from relatively low market share concentration. RFIDs are still a fairly new product and there are no suppliers that dominate the market, giving buyers a wide selection to choose from. Major vendors include Trimble Navigation Limited, Motorola Solutions and Zebra Technologies. For more information, visit IBISWorld’s Radio Frequency Identification Devices procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of radio frequency identification (RFID) devices. RFID uses short-range radio frequencies to track packages and objects within short distances. RFID systems consist of tags, readers and antennae. Tags store information and are attached to an object. Readers and antennae send out radio waves to read the information stored on the RFID tag. This report focuses on RFID tags but readers and antennae will also be discussed. This report excludes bar code technology and systems.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.