Revenue from electronic tags used in tracking goods from suppliers to store shelves are expected to reach $2.8 billion in five years, a market research firm said Wednesday.

Sales of radio-frequency identification tags, or RFID, are expected to increase dramatically through 2009, as major retailers and suppliers adopt the technology, In-Stat said. Revenues are forecast to jump to $2.8 billion in 2009 from $300 million last year.

"By far the biggest RFID segment in coming years will be cartons/supply chain," In-Stat analyst Allen Nogee said in a statement. "This segment alone is forecasted to account for the largest number of tags/labels from 2005 through 2009."

Wal-Mart Stores Inc., the world's largest retailer, is driving this market through its mandate that top suppliers use the technology, In-Stat said. Target Corp., Albertsons Inc. and the U.S. Department of Defense have similar initiatives.

Widespread adoption of the technology is expected to take a couple of years to ramp up, given that today's tags are still expensive, In-Stat said. Tags currently cost from as low as 15 cents a piece to a high of more than a $100.

Privacy issues will also slow adoption initially. Courts and governments around the world are in the process of sorting out legal issues that will enable businesses to use the technology without violating people's privacy rights.

Beyond supply chains, the second largest market for RFID during the five-year forecast is tracking consumer products on store shelves, In-Stat said. This market, however, is the most privacy-sensitive area.