What does 2018 hold for NFC and RFID enabled smart packaging?

Over the last few years, smart packaging has been something of a hot topic within the labeling and packaging industries. Will it actually happen? When will it arrive? How much will it cost? Where and how will it be applied? And will it live up to the hype?

Up to now, the idea of affordably integrating intelligence and interactivity into the packaging of everyday products seems to have amounted to just that – hype. However, as we move into 2018, we’re starting to see some genuine traction. It’s an exciting time.

So, as a company focused on reinventing flexible electronics to enable ultra-low-cost NFC and RFID solutions for mass market smart packaging, what are PragmatIC’s top predictions for this market in 2018?

2018 will see increasing traction for NFC, with mass-market deployments becoming viable for the first time.

Developments in 2017

We have seen two major NFC trends in 2017.

The first relates to the increasing penetration of NFC readers on consumers’ phones. Apple iOS11 has finally opened up its NFC APIs, allowing third party apps to read NFC tags using the latest iPhones. It is possible that in 2018 over 50 percent of iPhone users will be able to read NFC tags. Android phones have had this functionality for some time, but although iPhones represent a smaller percentage of the smartphone market, Apple’s move is nevertheless a significant development for brands looking to leverage NFC technology and smart packaging for consumer engagement.

Secondly, and perhaps more important, we are seeing significant reductions in the cost of NFC tags. New developments in flexible electronics are allowing the production of NFC tags at an order-of-magnitude lower cost than ever before, as well as radically reducing the cost of the assembly processes used to produce tags and inlays. PragmatIC is at the forefront of this with our flexible integrated circuits (FlexICs) and FlexLogIC low capital, high capacity fab-in-a-box production system. Finally, there is a demonstrable route to the much-touted one cents tag, the price point at which NFC is predicted to move from a ‘premium’ product feature implemented at limited scale or on high value products, into everyday high volume, low cost FMCG packaging. As a bonus these new FlexICs are inherently more suitable for the real world challenges in FMCG packaging. They conform to the varied product shapes and are robust enough to withstand the journey through a high speed packaging production line.

While it is unlikely that the one cents (at volume) price point for NFC tags will be reached within 2018, it does seem feasible that prices could fall by up to 80 percent, and will continue to drop from there on. So, NFC and RFID enabled smart packaging for the mass market is approaching faster than many might think.

New mass market applications for simple sensors

The electronics industry has seen an explosion in the use of sensors in everything from phones to smart watches to smart home appliances. However, to-date, these sensors have tended to be relatively complex and require significant computing power to interpret them.

By way of contrast, low-cost, mass market consumer applications often require a much more focused approach in order to be viable at an appropriate scale and cost point. This leads to the integration of much simpler sensors, often designed for single use.

We predict an interesting trend in 2018 will be the addition of these simple sensors to tags to provide greater contextual information about the environment or status of the tags and the products to which they are attached. This might be anything from temperature, to humidity, to the ‘freshness’ of the product or integrity of the packaging. We expect several compelling product concepts and use cases to be developed in this area in 2018, scaling up to volume until 2019.

2018 will be all about simplicity

Beyond NFC, and RFID tags and sensors, we are seeing a large number of exciting ideas for smart packaging. For example, integrating flashing lights, displays, audio, etc onto products.

However, practical considerations such as implementation complexity and cost are likely to remain as barriers to volume deployment of such niche concepts in 2018. These concepts generally require a power source for standalone operation such as printed batteries which are still relatively expensive and impose significant constraints on the form factor of the target product.

In comparison, RFID and NFC, in its simplest form can harvest energy from the RF signal transmitted by the reader/smartphone. In this way the cost of the application is minimized. We predict that these simpler RFID and NFC consumer engagement projects will be the majority of the new use cases in 2018, the more complicated ones will remain niche and low volume.

PragmatIC and Talkin’ Things recently formed a strategic partnership to drive mass market adoption of smart packaging, centered around flexible integrated circuits, which you can read more about here

Gillian Ewers, vice president of marketing at PragmatIC, believes we’re not far from a price revolution in NFC and widespread adoption of this technology, which you can read more about here