Smart tags will help massify IoT

Smart tags that use flexible printed electronics will gain scale and help massify the Internet of Things (IoT). According to a study by ABI Research, these devices promise to greatly expand the use cases and value generated, initially in supply chain sectors but with significant opportunities in other areas.

“Over the past 15 years, the printed electronics market for asset tracking has been driven by radio frequency identification systems, which is expected to remain a dominant technology. Yet, the evolution of low-power technologies used by IoT, from Bluetooth to cellular and non-cellular LPWAN, are enabling the creation of tags with more enhanced features,” explains Tancred Taylor, analyst at ABI Research. Cost, simplicity, range, lifetime and higher data throughput are all elements that will enable entirely new use cases not previously possible.

Cost is one of the many aspects of smart tags that make them more attractive. They are evolving in several directions, allowing them to change the way data is collected, which will be the main source generating value, according to ABI Research. Initially, use cases should emerge most relevantly among supply chains, but they may also emerge in retail and B2C markets or even in industrial management applications in the not so distant future.

In the specific case of supply chains, there is currently a technological vacuum in the smart tag market, with complementary technologies thought of and implemented separately from other functions, according to the study. There is great untapped value in considering smart labels as a more integrated part of supply chain solutions. This includes, for example, considering the integration of smart labels with paper labels to provide human- and machine-readable formats containing data for various links in supply chains, e.g. sender, logistics companies, customs, and consumer.

“The important thing will be to understand how smart tags will work with IoT and to position yourself in the value chain to exploit this developing sector to the full,” comments Taylor.

Labels by type of connectivity technology

Smart tags using Bluetooth started to be adopted in 2020 and are growing rapidly. Many projects are in early stages and should see first results by 2023.

Proprietary smart labels have also started to gain ground globally. In China, ZiFiSense is the market leader, with several projects in 2019 and 2020. In other regions, many projects have emerged in 2022 using other proprietary technologies, many with Sigfox designs.

Initiatives using LoRa are in the early stages. Labels based on cellular technologies are a more technical challenge for smart tag market participants, according to ABI Research. Production of critical components, such as battery, has not yet proven to be reliably replicable in high volumes.

“The choice of connectivity type is the most important consideration in determining the value that will be generated by smart tag solutions. All connectivity options have a large addressable market, but cater for different use cases,” explains Taylor.

Other considerations

The market for smart labels with short-range wireless (SRW) technologies continues to grow, but two developments will be key, according to ABI Research. First, it will need to move to a licence-based model for hardware production (as Wiliot has done and as Reelables is trying to do), allowing it to widen availability and scale up the technology.

Secondly, it will be important to integrate with more long-distance network (WAN) tracker providers, enabling Bluetooth devices to use fixed access points (APs) and dedicated gateways, third-party devices such as fixed and mobile gateways, and even smartphones. This integration will enable a much wider range of use cases.

For long-range (WAN) smart tags, there will be market opportunities in the medium term. While very interesting, WAN smart tags with cellular technology will not be viable until the price reaches US$8 to US$10 or less, in ABI Research’s view. In the meantime, there are market opportunities for WAN smart tags as low-cost trackers targeting lower-value assets (e.g. pallets, boxes, and containers).

Overall, two fundamental questions in the smart tag market have yet to be answered. The first has to do with who will foot the bill. While many parties will benefit from the intelligence produced from the data that smart tags will carry, not all will want to make investments, and some will expect others to make the data available as a free or value-added service.

The second question is associated with data sharing. Agreements will be essential to establish a suitable architecture for smart tags and the distribution of value generated between the different parties.

In time, companies to follow in case smart tags are on your radar: Sony Sensors; STMicroelectronics; Wiliot; ZiFiSense; Adrich; NanoThings; Reelables and Tive.