Passive RFID Label Prices and Volumes in a Vicious Circle

In a classic “vicious circle” dynamic, production costs for UHF labels (hence for Gen 2 passive labels) are still at levels tending to inhibit the high-volume deployments that would provide economies of scale. Research analyst Robert Foppiani says, “At current prices, many end-user companies in the retail/CPG supply chain struggle to determine a compelling business case for RFID. Those companies that have high value, high risk goods are often able to find a business case to justify the investment in RFID passive labels at current prices. But many members of the value chain are operating on thin margins, and most are unwilling to drop prices any further until there is much greater volume.”