Issue #194 | June 4, 2009 | by Bret Kinsella
RFID tag prices go down as performance goes up
Buyers just don’t understand RFID tags. It’s not surprising. There are hundreds of different RFID tags and almost as many vendors looking to sell them. We receive more questions about tags – their performance, pricing and design – than any other topic.
One of the most common questions we receive at ODIN is, “What do RFID tags cost?” That's a loaded question. The answer: “What kind of tags?” That's why we have often published information on tags, now culminating in the "RFID Tag Pricing Guide," released last week.
The good news is that RFID tag prices are falling. At the same time performance has improved. This is the right price-performance curve for end users.
Most of the information our guide provides relates to passive UHF tags because that is the most rapidly changing segment today. Though we include them, HF tags represent a mature, far more stable market with known price levels.
Myths about passive tag pricing
Tags are not all created equal. In a real-world environment reaches this conclusion quickly. Performance is just one parameter. When you receive pricing guidance, make sure you know the tag format and characteristics before planning around it.
ODIN was brought in by a company in ffice:smarttags" />Europe that had built an entire business case around passive UHF tag pricing, but actually needed HF tags which carry more than twice the cost. Educating them on the cost differential was eye opening for them, if not entirely easy to digest.
There are specialty tags optimized to read on metal surfaces, to withstand rugged conditions, provide extended memory or incorporate sensors. Tags have a variety of form factors and can be customized for item level tracking. All of these features impact cost.
Tag costs are important. As the largest ongoing cost of most RFID systems, tag prices can make or break a business case. Our goal with the "RFID Tag Pricing Guide" is to educate end users on tag costs and the characteristics that can drive those costs up.
Things you need to know as an end user include:- Tag prices vary widely depending on volume and features- features are important determinants of prices whether related to size, ruggedization, sensors or read range
- UHF and HF tags have different costs, the latter are typically 2-4x times more expensive
- Tags designed to mount on metal surfaces are priced in the dollars and not the pennies due to specialty materials required to read when near metal
- Active RFID tags cost 10’s of dollars and are much more sophisticated and costly to employ and use than passive systems, but provide rich features and read ranges not typically available in passive RFID
With these variables you can see how tag costs can mean the difference between a positive and negative return on investment and setting proper expectations with the CFO. Many companies unknowingly create apples to oranges comparisons by not focusing on the variety of features that may be necessary to meet the use case requirements.
The general specifications for these labels are:- UHF Class 1 Gen 2
- 4” wide x 6” Feed
- Thermal Transfer Paper with General Purpose Adhesive
- Die Cut (there may be a onetime tooling cost involved for special size labels)
- 3” Core
These are fully converted labels. The 5.8 cent tags announced in January are for what is called a dry inlay, which does not have adhesive.
The impact of tag silicon and memory
One example of a feature that drives tag cost is user memory. Tag silicon is the memory component of the tag. It is the microchip that stores data and enables the tag to communicate with readers. However, different use cases call for different silicon memory space requirements. More memory equals more cost.
Larger memory enables tags to carry more data right on the tag than typical license plate information found on lower cost 96 bit tags. Why is this important? The license plate 96 bit tags are great for unique identification, but require connectivity to a database to gather or record additional information. If you are working in an austere or disconnected environment, this may be the difference between useful and useless.
If we assume that one ASCII character requires 8 bits of memory space, then the user can program 12 ASCII characters on a 96 bit tag (EPC memory only), whereas an extended memory tag with 512 bits the user can add 64 characters in the user memory space. This could mean space to add lot code and expiration data right on the tag in addition to the license plate serial number. That may be data you want access to even if you can’t connect to the corporate network.
High memory tags of 1-8 Kbytes take this even further. . Assuming 30-50 maintenance records over the life of a product, high memory tags can offer years of maintenance data right on the tag versus a simple serial number. In the airline industry this allows maintenance crews to work effectively even if no WiFi connectivity is available.
If you start with these ideas in mind, you will be a better consumer. The full pricing guide includes more detail on important elements such as tag dimension, frequency, printability, durability and power. It is intended to fill the information gap and provide end users with objective information on the status and drivers of tag costs. Unlike tags, the RFID Pricing Guide is free.
Bret Kinsella was first engaged as a ODIN customer and then joined the company in 2004 to help build it into a market leader. For a FREE copy of the "RFID Tag Pricing Guide," go to >
RFID Tag Pricing Guide-ODIN technologies
