For many years, the French paid little attention to radio-frequency-identification (RFID) technologies. Now, tags and readers—high-tech bar-code systems—appear to be following the same arduous path as the Internet. Despite the fact that they've been hailed as revolutionary, these systems are struggling to find users.

In the area of RFID development, the French market lags behind its European neighbors, Germany and the United Kingdom. A number of companies have already sold RFID tags and readers for applications like transport or animal identification. Yet only a handful of RFID suppliers have acquired customers for the new generation of RFID tags. This generation promises to deliver applications like product tracking or logistics.

Many French companies have been expanding their product ranges for years. Within the last few months, this expansion has gathered speed. Companies have either developed and manufactured new RFID systems or bought tags from other suppliers. French companies are positioning themselves for the long-awaited RFID battle. Despite this build-up, however, the players are all faced with the same problem of uncertainty over the competition. They're left to contemplate the future. So they worry about the sizes of various sales forces and the marketing strategies that are being espoused. With such an intellectual conflict underway, it has become nearly impossible to design an efficient sales strategy. As a result, suppliers in France are still facing uncharted paths due to a lack of competitor awareness.

A recent study from Research Solutions sheds light on this dilemma. The study, which focuses on the French marketplace, comprises interviews with over 40 suppliers. It concludes the following:

1. Nearly all companies have added new tags to their product ranges over the last few months. A great number of them are about to expand their portfolio by the end of the year.

2. A good number of companies—mainly from the United States—have entered the market during the last few months. But they are scarcely known, as they haven't yet sold RFID products.
3. To boost their sales forces, a few suppliers are engaged in vast recruitment programs.

Another important conclusion that is revealed is that all of the companies that were involved in the study are trying to establish a position in the French RFID market. They're working toward this goal without knowing the key competencies of their competition. Nor do they know who their competitors are.

The study also reveals that not a single company has a clear idea of the number of suppliers that are currently operating in the market. Nor do they know how many suppliers are going to enter the market in the near future. The truth of the matter is that competition is very likely to increase significantly for three primary reasons:

1. Many suppliers are about to introduce ultra-high-frequency and hyper-high-frequency systems to their portfolios (SEE FIGURE).
2. A lot of international businesses are currently striving to establish either a sales subsidiary or distributor on the French market.
3. Some scarcely known companies have patented high-performing devices that are different from the products that are commonly used in the market.

What does this information mean for the French marketplace? For starters, the French RFID market is still in the process of taking shape. The developments of the last few years and—more importantly—the past few months have proven that the number of companies that are providing RFID products is increasing much faster than the sales volume. If this trend continues, a good number of companies will be forced to depart from the market. There are two main reasons for this prediction. As the number of companies that are supplying RFID products increases and marketing communication intensifies, some suppliers are likely to be crushed by advertising and R&D cost pressures. Secondly, some suppliers are focusing on few applications. As a result, they may not have the anticipated feedback from current test pilots.

Until now, French companies have sold little compared to what the market is predicted to be in the very near future. Applications in logistics and product tracking have a huge potential demand. After all, a single company isn't yet dominating this market segment. All of the suppliers are struggling to achieve market leadership without having a proper compass. The bottom line is simple: Because companies like Texas Instruments and Siemens have good reputations and strong backgrounds in RFID, they could end up selling far more than their current sales might suggest.

By asking when the boom will commence as opposed to who is currently implementing the most appropriate leadership strategy, many French companies may be making a big mistake. Will the French step up to the plate or will other competitors step in to fill their shoes? The answer remains to be seen. The only certainty is that successful RFID companies will need to find the equilibrium between excessive marketing and R&D costs and price cuts. In addition, they must be able to effectively assess competitors' current activities and intentions.