Proving the Business Case for the Internet of Things

Asset and fleet tracking to boost real-time location market

Steve Rogerson
April 15, 2015
 
Asset tracking and fleet tracking applications are providing significant growth impetus that will help the global real-time location systems (RTLS) market reach $7bn by 2020, according to a report by Industry Arc.
 
RTLS is a technology that is used to identify and locate objects, assets or individuals automatically in real time. The goal of RTLS is to continuously track the location of the targets. It works with the help of a tag that is attached to the target from which wireless signals are sent and received by the readers. The readers are usually fixed at predetermined positions and they transmit the location data to the software, which then interprets the exact location visually to the end user.
 
The global RTLS market generated revenue of around $2.3bn in 2014 and is estimated to reach $7bn by 2020, according to the report. A consistent drop in prices of RTLS, increased penetration in APAC countries, and growing adoption in manufacturing and enterprise segments especially in growing end user applications such as sports, retail and livestock management are the key contributors for the market growth.
 
The RTLS market can be segmented based on the technology into active and passive RFID. In 2014, the active RFID segment accounted for the largest share. The passive RFID segment is projected to grow due to development of new applications, with those from healthcare and enterprise industries being the major drivers.
 
The active RFID RTLS market can be further segmented based on type of technology used. Wifi is the largest market with $961m in revenue in 2014 followed by GPS RTLS. Ultra wide band (UWB) RTLS is forecast to exhibit the fastest growth due to the growing use for personnel tracking and asset tracking.
 
Vehicle tracking, asset tracking, personnel tracking, activity tracking, containers tracking and work in progress (WIP) tracking are the key applications for real-time location systems. Asset and inventory tracking is the most dominant end use of RTLS products with a total market of $797m in 2014. Personnel tracking is the fastest growing application with a market size of $281.3m in 2014 and estimated to grow at a CAGR of 29.7% to 2020. This is primarily because personnel tracking is being used to improve safety and security of employees who work in hazardous and risk prone environments such as mines, petrochemical industries and construction.
 
The RTLS market can be analysed based on different industry verticals such as manufacturing, healthcare, defence, personal security, logistics and retail. The logistics market held the highest market share of 32% in 2014 due to customer demand for asset tracking and growing demand for GPS tracking of shipments. The manufacturing industry, however, is the fastest growing segment, especially in the APAC region where automation is increasingly being adopted across factories.
 
The demand for real-time location systems with analytical features has also led to significant growth in the logistics and retail market. Growing applications in sports and retail to track user data and use analytics to generate patterns are set to lead to growing adoption. However, privacy and security concerns regarding tracking and storage of personnel tracking RTLS devices, particularly in Europe, are set to hinder growth in the enterprise market.
 
The North American market was the largest market in 2014 followed by Europe. However the APAC region is poised to grow at a very high CAGR due to more emerging economies investing significant capital into logistics and manufacturing industries across the supply chain networks. The growing awareness and declining prices that overcome the price sensitivity in this region are also set to propel the adoption.
 
The top five companies in the RTLS market are all based in the USA – Ekahau, Ubisense Group, Centrak, Zebra Technologies and Stanley, Black & Decker. These companies held a combined RTLS market share of around 40% in the fiscal year ended 2014. The RTLS companies have looked to agreements and product launches as key strategies for growth.
 
Companies are focusing on agreements and partnerships to use a wide distribution network to improve sales. Agreements have also been inked to develop partnerships and drive the growth in revenue. For example, Ekahau reached an agreement with six American schools in 2013 to provide RTLS for panic buttons. Product launches were focused on improving accuracy and speed to satiate customer demand, and on capitalisation of demand for new applications to broaden the customer base.
 
There is a significant global demand for RTLS systems with Wifi based systems leading the charge. The economic growth, particularly in APAC, has led to a growing manufacturing market for RTLS systems supported by the declining RTLS prices. Many manufacturing industries, healthcare organisations and enterprises have started using RTLS for personnel and asset tracking.
 
According to Industry Arc analysis, the future of the RTLS market looks bright and is forecast to be a good segment for future investments and acquisitions by OEMs in the electronics and semiconductors industry.