Supply Chain Digest didn’t make it to RFID World this year, but investment researchers Bear Stearns did, and the always reliable Phil Alling and Andrew Matorin confirmed what we and they have been saying for some time, that the market for Electronic Product Code-based RFID, driven primarily be the retail supply chain, is moving slowly.

“RFID industry participants remain frustrated about lower than expected tag volume growth in the retail supply chain, in particular for Wal-Mart related mandate activity,” Bear Sterns wrote. “While the retail giant continues adding suppliers to its pallet and case level tracking rollout, and more stores, the number of SKUs tagged by most participating suppliers remains low, according to industry observers.”

They note that for UHF-based, passive RFID tags and systems in the supply chain, Wal-Mart is really driving the train, and that RFID technology suppliers believe that slow growth will persist in this space until Wal-Mart compels suppliers to step up their tagging levels.

By Bear Stearns estimates, about 300 million UHF tags were shipped last year, with estimates for upwards of 500 million in 2007. While this represents impressive year on year growth, it is well below the billions of tags that were forecast for 2007 in previous years, and not enough to really drive financial success for the many suppliers to this market.