RFID will begin to experience broader industry adoption with business value-focused implementations toward the end of 2006 when new licence revenue totals $751 million. By 2010, Gartner forecasts worldwide RFID spending to surpass $3 billion.

"Just because bar codes are used extensively in distribution centers does not mean RFID will be," says Jeff Woods, research vice-president at Gartner.

"Businesses are beginning to discover business value in places where they cannot use bar-coding, which will be the force that moves RFID forward.

"As the innovators' trials become public, broader deployments across emerging sectors, not just consumer goods and retail, will become evident in 2006 and 2007."

Gartner analysts said companies should not think of RFID tags as a replacement for bar codes.