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Did Apple Just Kill NFC?

1:55 PM No NFC chip in the iPhone 5 isn't just disappointing for Apple fans; it will stall the entire market

Sarah Thomas

September 13, 2012

2 Min Read
Did Apple Just Kill NFC?

1:55 PM -- Apple Inc. (Nasdaq: AAPL)'s exclusion of Near-Field Communications (NFC) from the iPhone 5 could have farther reaching repercussions than just disappointing those who wanted to ditch their wallet for their new phone. (See iPhone 5 Arrives With 4G LTE.)

I think it's reasonable to suggest that Apple's NFC slight will set the entire market back a year -- possibly even two, when you think about the iPhone case and accessory market that's put on hold now. (See Apple iPhone 5: What Happened & What Didn't .)

I realize that's giving a lot of credit to one company in a market that many more are working on, but hear me out. Apple's mobile products are responsible for making a lot of technologies mainstream. Video chat existed before FaceTime, but it wasn't well known. Mobile apps were around, but Apple's App Store caused them to blow up.

Apple's brand power aside, the contactless market is shaping up on its own, without NFC. Sure, some companies, like the wireless operators' Isis and handset makers like Nokia Corp. (NYSE: NOK) and BlackBerry are planning to evangelize it, but it's been a slow-moving process and there's plenty of alternatives that are doing quite well in the interim. (See 5 iPhone 5 Features Carriers Should Care About and iPhone 5: Which 4G Carrier to Pick?)

Square Inc. is the best example now. It has inked deals with most major credit cards, not to mention is the mobile payments vendor for Starbucks, and it's on track to process $6 billion in transactions this year. It's an easy technology to use, doesn't require a new chip in handsets to implement, and it's popular with merchants, too. None of that can be said for NFC.

As to why Apple didn't include NFC, Senior VP Paul Shiller tells AllThingsD that NFC is a solution looking for a problem. Apple's Passbook app, which let users store their mobile tickets and loyalty cards, does enough for most consumers, he believes. (See Apple Could Make Mobile Payments AuthenTec.)

He may be right but, by that logic, why not continue refining 3G on the iPhone for wireless connections? After all, users don't really need 4G wireless.

What NFC does provide is at least the concept of a standard way for carriers, vendors and third parties to support contactless payments on a smartphone. Apple passing over the technology for another year or more, however, will make it more likely that other, likely non-standard, ways of doing the same thing will gain enough traction to make NFC technology less attractive to implement for major retail outlets, particularly in the U.S., as well as wireless providers of all stripes.

So if Apple hasn't killed NFC with non-inclusion this time around, it has certainly given the would-be mobile wallet tech a serious mugging and sent it reeling into an uncertain future.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

About the Author(s)

Sarah Thomas

Director, Women in Comms

Sarah Thomas's love affair with communications began in 2003 when she bought her first cellphone, a pink RAZR, which she duly "bedazzled" with the help of superglue and her dad.

She joined the editorial staff at Light Reading in 2010 and has been covering mobile technologies ever since. Sarah got her start covering telecom in 2007 at Telephony, later Connected Planet, may it rest in peace. Her non-telecom work experience includes a brief foray into public relations at Fleishman-Hillard (her cussin' upset the clients) and a hodge-podge of internships, including spells at Ingram's (Kansas City's business magazine), American Spa magazine (where she was Chief Hot-Tub Correspondent), and the tweens' quiz bible, QuizFest, in NYC.

As Editorial Operations Director, a role she took on in January 2015, Sarah is responsible for the day-to-day management of the non-news content elements on Light Reading.

Sarah received her Bachelor's in Journalism from the University of Missouri-Columbia. She lives in Chicago with her 3DTV, her iPad and a drawer full of smartphone cords.

Away from the world of telecom journalism, Sarah likes to dabble in monster truck racing, becoming part of Team Bigfoot in 2009.

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