Some media commentators have begun talking down the market for passive RFID tags within the retail supply chain.  They cite slower-than-predicted progress by the two mighty drivers of RFID adoption, the Wal-Mart and the US Department of Defense mandates, and suggest that major vendors Motorola and Intermec may be reordering their priorities away from the compliance mandate-based commodity tag market.  These and other passive UHF Gen 2 tag players have adjusted their near-term strategies to focus more on "specialty" tag form factors and non-retail supply chain compliance applications.  But ABI Research, while acknowledging that passive label markets have grown more slowly than hoped, has reiterated that they will ultimately reward those who have patience.
Why has the development of this retail supply chain market been slower than expected Michael Liard, the firms research director for RFID says, "End-to-end deployments based on passive UHF RFID tags do involve technological and physical challenges.  Price, too, has always been an issue despite significant reductions in recent years.  Shipment volumes are rising: eventually they will trigger further price drops, although at the moment many vendors are running on slim margins."

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