Explains WSJ saying that “Radio ID tags may soon be placed in every product imaginable”:
RFID tags come in a wide range of sizes, price ranges and degrees of sophistication, but they all have two basic elements: a computer chip and an antenna. The simplest tags, designed for eventual mass retail use, include tiny chips that can store around 100 bits of information. Depending on the system, the chips can read back and sometimes write new information into their memories. They’re linked to antennae, made of coils of copper or aluminum wire or a special conductive ink, which receive a radio signal from the RFID reader, a separate device that emits such signals and processes the tags’ responses. The simplest versions of this technology, so-called passive tags, don’t even have batteries. They draw their energy from the reader’s radio signal itself, much as a solar calculator is powered by light waves.
Typically, when a tag comes in range of a reader, the radio signal powers up the tag. The computer chip on the tag then sends back a radio signal to the reader containing the data with which it has been encoded. In the systems that some retailers have begun piloting, the reader would be linked to a computer network, where software would be able to analyze the data sent back by the tagged object, identify it, and then issue instructions based on that. The software, for example, might charge a customer’s account for the item, it might order a robot arm to pack the object in a specific mail-order shipment box, it might register in a database that the tagged item has made it from the warehouse to the store’s shelves, it might note that a customer had taken an item into a dressing room but decided not to buy it.
The basic RFID technology is pretty simple, as modern electronics goes, and more than 50 companies, including such heavyweights as Texas Instruments Inc., Dallas, and Philips Electronics NV, based in the Netherlands, make the equipment.