Demand for smart labels in the United States is projected to expand over 14 percent annually through the year 2007, approaching eleven billion units valued at $460 million. By 2012, demand will surpass 30 billion units, worth over $1.2 billion. Smart labels will penetrate both existing and new labeling applications, based on their ability to add value to labels’ basic identification function along various parameters. Smart labels in supply-chain management applications will reach 7.6 billion units by 2012, accounting for one-quarter of smart label demand. These and other trends are presented in Smart Labels, a new study from The Freedonia Group Inc., a Cleveland-based industrial market research firm. By far the best gains are expected in the nascent radio frequency identification (RFID) label segment, where the market size will nearly triple each year.

In the near term, the greatest growth will be in the labeling of mail and packages, crates and pallets, airline baggage, library books and military assets. Over the longer term, falling prices, greater economies of scale, technological advances and the establishment of uniform RFID communications standards will support the development of additional applications. However, consumer privacy concerns will remain a major hurdle, especially in the key retail segment.

Basic electronic article surveillance (EAS) anti-shoplifting labels will continue to dominate into the next decade, based on successful security modality and widespread use in retail. EAS label sales will continue to benefit from falling unit costs, source tagging initiatives and the opening of apparel, or “soft goods,” based on the transition from EAS hard tags to labels.

It’s in the Cards

Smart card use among Fortune 500 companies is on the way up. Gemplus’s 2003 “U.S. Corporate Security Systems Study” shows rising interest and commitment to smart card-based enterprise security. Gemplus International S.A., is a provider of smart cards. The study by Frost & Sullivan, a consulting company, provides insight into the present security systems, needs, and prospective future trends of Fortune 500 companies.

Based on interviews of senior executives, there is a profound interest in using smart cards as part of their physical and/or logical security systems. The latter is an important area for security to address.

The Federal Bureau of Investigation and the Computer Security Institute, in a report of 2002 incidents, found that 90 percent of large corporations and government agencies detected computer security breaches. The traditional employee badges used within most corporations today are unable to address all these electronic security issues. Results from study indicate an increased interest by Fortune 500 companies to deploy a single token for both physical and logical security. Smart cards respond to this challenge by offering a versatile platform to combine building access and network security on one card.

“More than one-third of Fortune 500 companies surveyed, 39 percent to be precise, plan to use smart cards to enhance and strengthen their corporate security systems within the next three years,” says Dave Ludin, of Gemplus. “This research shows that already 30 percent of Fortune 500 companies are currently using or testing smart cards within their security systems.”