IoT refers to a network that realizes intelligent identification, positioning, tracking, monitoring and management of targeted objects achieved by exchange of information and communication between such targets and internet via intelligent terminal products under predetermined protocol. IoT devices include barcode/QR code reading devices, RFID tags and RFID read-write devices, etc. Some of the IoT devices, such as active RFID tags and devices, can send and receive information by themselves.
. City management
In transportation sector, IoT technology can automatically detect and report the condition of road and avoid the traffic of overloading vehicles. In addition, the IoT system can automatically deploy traffic lights in the road congestion and recommended the best route. In construction sector, through the induction technology, the building lighting can automatically adjust the brightness, to achieve energy saving and environmental protection. Besides, the operation condition of the building can also be sent to the administrator through the IoT.
. Modern logistics management
By storing the sensor chip in the logistics commodity, all the process of supply chain including the purchase, manufacture, packaging/loading, stacking, transportation, distribution, sale and service are accurately understood and grasped. The perceptual information and the backstage GIS/GPS database seamlessly integrated into a powerful logistics information network. This wisdom logistics can greatly reduce the cost of manufacturing, logistics and many other industries, improving the profits of enterprises.
. Asset management
By bundling RFID tags with specific assets, it can realize the monitoring, management and positioning of each asset at any time and also realize the business functions such as, asset discovery, asset upgrade and asset mobilization, which greatly improve the work efficiency and accuracy, reduce the overall operating costs of enterprises and the intensity of human work, providing easy and convenient practices.
Connection between IoT and RFID
Identification technology, sensor technology and mobile ad hoc network are common technologies used in perception layer of IoT architecture, where RFID is one of the basic and most important identification technologies. RFID devices include RFID readers and RFID tags. With the use of electromagnetic fields, RFID reader can identify and track the RFID tags and gain access to the electronic information stored in these tags without the need of placing them in line of sight with the reader. Depending on their way to draw power, RFID tags are classified as active tags, passive tags and semi-passive tags. Passive tags account for major share of the total RFID tag market in terms of sales value due to their low price, small size and relatively simple in terms of design and technology.
The market size of RFID devices in China grew from CNY 6.4 billion in 2010, accounting for57.7% of RFID market, to CNY 34.7 billion, accounting for 64.4% of RFID market in 2016, with a CAGR of 32.5%. It is expected that China RFID devices market will maintain a high growth rate from 2016 to 2021 mainly owing to supportive policies from the PRC government, broader adoption of RFID technology and higher demand for high-end devices. China RFID devices market will increase from CNY 34.7 billion in 2016 to CNY 112.5 billion in 2021, accounting for 63.1% of RFID market, with a CAGR of 26.5%. From 2010, the development of IoT industry has been included in national development strategy, the demand for active RFID devices rose continuously, which was driven by the prompting of policies, such as IoT 12th 5-Year Plan (《物联网「十二五」发展规划》). The market size of China active RFID devices market went up from CNY 0.2 billion, accounting for 3.1% of RFID devices market, in 2010, to CNY 4.1 billion, accounting for 11.8% of RFID devices market, in 2016 with a CAGR of 65.3%.
The active RFID devices have many advantages over passive devices, such as larger data transmission volume, longer transmission distance, better compatibility and larger data storage in tag, the most important is that it can transmit data actively. However, before 2010, the technology of active RFID devices was not mature and active RFID tag relied on battery for power and was more costly, the market size of active RFID was relatively small.
However, with the emergence of low frequency triggering electronic tags and the application of button batteries and print battery with lower energy consumption, the constraints of active RFID tags will be gradually addressed.
Generally, active RFID products are more expensive and profitable than passive ones. Moreover, despite the current RFID standards vary in different countries, with the large-scale application of RFID in the global logistics, transportation industry, the unification of RFID standards has become the industry consensus. After the unification of RFID standard, active RFID devices will have broader application in the future. It is estimated that the market size will reach CNY 34.5 billion, accounting for 30.7% of the RFID device market, in 2021 with a CAGR of 53.2%, at a much faster rate that of passive RFID devices. Passive RFID tags are relatively standardized and passive tags products from different suppliers are compatible with each other, which means passive RFID tags produced by one supplier are compatible with the readers produced by other suppliers.
However, active tags products are very exclusive between each other, namely active tags from one supplier are only compatible with the readers produced by the same supplier. In addition, as active RFID products are consisted of more components such as battery and communication chips, they can allow more customization such as integration with RFID sensory devices etc. Customized RFID products generally sell at much higher prices than standardized RFID products. Gross profit margin depends on the type and depth of customization done. High level of customization would increase selling price as well as increase gross profit margin to above 50%.