Despite vendors such as HP and Intel increasingly touting the benefits of the technology, radio frequency identification (RFID) is yet to make an impact in the Australian market.
With the Australia Communication Authority (ACA) still developing plans to dedicate a segment of spectrum to the technology, analysts and distributors are playing down the hype.
Managing director of wireless distributor, Peacock Bros, Neil Crump, said awareness in the market place was growing but had still to translate into tangible gain.
"There are a few pilot sites being implemented, but there are no sales - just fact finding and tyre kicking," he said.
Express Data managing director, Ross Cochrane, said that apart from the high volume space, there had been precious little development for the channel supply chain.
While IDC's research manager for wireless and mobility, Warren Chaisatien, was optimistic about the technology's potential, he said it was still early days for RFID in Australia.
"A year ago very few people were briefed on the technology but it has now reached a point where decision makers are at least aware of the productivity gains it can bring," he said.
Despite this, there was a feeling in the industry that it would have to wait until the end of 2006 before organisations were seriously investing in RFID, Crump said.
"The cost of the products, a limited hardware offering and the ACA's indecision over which frequency to use continue to affect RFID adoption," he said.
Concurring, Chaisatien said businesses realised the productivity and efficiency benefits of RFID but cost was still the major inhibitor.
"Until RFID tags come down to one or two cents each it will not make much sense to deploy them," he said. "There is also a serious cost involved in deploying the necessary infrastructure for the technology."
Crump said costs would start to come down once a frequency spectrum had been agreed and manufacturers could concentrate on producing a single style of tag.
Integrity Data Systems CEO, Ross Chiswell, said cost and frequency issues had led his company to instead explore the approach of using Wi-Fi tags and wireless LANs, which were already covered by existing regulations.
"Traditional RFID tags are cheap as chips but the infrastructure to support them is expensive," he said. "While Wi-Fi tags are a little more expensive, businesses can save money and gain even more efficiencies by simply using their existing wireless LAN."
Disputing that cost was behind slow RFID uptake, Intel Australia's RFID business development manager, Corey Loehr, said an inability by manufacturers and the channel to link the technology to a business case was more to blame.
"With companies like Intel creating readers, bringing processor costs down and providing software solutions, the business case is now there," he said. "If companies are kicking tyres then that tells me someone hasn't taken the time to explain the business case to them."
Chiswell said RFID had so far been sold as a technology rather than as business efficiency improver.
"The channel will sometimes focus on those things that are just easy to sell instead of going into businesses and finding out how to help them," he said. "You either need a small player that is smart enough to think that way or a global player whose sole reason for being is to help customers. In between you have too many in the channel who are not innovative."