Radio frequency identification (RFID) tags use radio waves to identify, track, sort, and detect persons and items. In these devices, communication takes place between a reader (interrogator) and a transponder (a chip connected to an antenna), often called a tag.
RFID tags can be active (powered by battery) or passive (powered by the reader field), and come in various forms, including smart cards, tags, labels, watches and even embedded in mobile phones.
The potential benefit of item-level tracking is tremendous. Being able to tracking the shipment and purchase of individual items confers benefits to marketers (knowing what's being purchased and when), operations researchers (tracking shipments, inventory, and lead time), and consumers (short waiting to check out with your shopping cart intact and the reader will scan everything automatically).
Currently, the cost of RFID tags made using conventional technologies are around 10-20 cents per tag. This cost makes them viable for tracking larger, more costly items such as cars, trains, and possibly even consumer goods at the palette and/or crate level. But it is too expensive for item-level tracking, which will require the cost to be reduced to the one-cent level as agreed by most experts.
With their high throughput and ability to be produced on cheap plastic substrate, printed RFID tags have the potential to reach this ultra low cost. The potential volume for such inexpensive tags would be in the billions or trillions per year, drawing the attention of many companies.