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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

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JameKatt 9/5/2013 | 11:40:36 AM
NFC is dead. Forget about it - it is the 3D of merchant payments. Apple killed NFC.

Apple's Passbook solution simply works for merchants without having to buy new equipment.

Starbucks, for example, works fine without NFC.

The key negative about NFC is that merchants will have to spend thousands of dollars per store to buy new equipment to handle NFC.  This is a huge negative.

Apple sees no need for NFC and lots of problems with NFC. 

Since everyone else is following Apple's lead - including Samsung and Google - no NFC for Apple means NFC is dead.

Apple's fingerprint sensor technology further kills NFC.  There simply is no need for NFC.
sarahthomas1011 12/5/2012 | 5:21:06 PM
re: Did Apple Just Kill NFC?

Wouldn't ya know it...I see now that Isis is delayed: http://news.cnet.com/8301-1035_3-57512526-94/isis-mobile-payment-service-hits-snag-delays-trial-run/. Not surprised. NFC is having a hard time getting off the ground.

sarahthomas1011 12/5/2012 | 5:21:06 PM
re: Did Apple Just Kill NFC?

Ha, I asked her a few iPhone 5 questions, and got "allow me to direct you to Apple's rather fabulous web site." Well played.

craigleddy 12/5/2012 | 5:21:06 PM
re: Did Apple Just Kill NFC?

We could ask Siri if Apple just killed NFC, but she'll probably tell us that no, Apple did not kill the National Football Conference. If we tell her that not including NFC in the iPhone 5 doesn't seem very consumer friendly to us, she'll probably send us Apple's Passbook app. Oh that Siri.   

desiEngineer 12/5/2012 | 5:21:04 PM
re: Did Apple Just Kill NFC?

As Soup says, Apple is very leery of cutting edge.  Gorilla glass and LTE are notable.


BTW, I think you should look at it this way: if Apple backs something, then it becomes popular.  If Apple doesn't back something, it just means it is holding back until it can make itself look good doing it.


-desi

larryw408 12/5/2012 | 5:21:04 PM
re: Did Apple Just Kill NFC?

They're going to need something new for the iPhone 6...

Soupafly 12/5/2012 | 5:21:04 PM
re: Did Apple Just Kill NFC?

Its too early to make the call on NFC.


You have to dive below the hype Sarah and see the wood not the trees. Your articles are usually informative and balanced, so I am going to put this 1 down to a low "starbucks" day.


Apple has never been a edgy innovator. They would like to sell you that story and if you buy that narrative then they are very happy! Reality is that they adopt a fast follower with a focused USP around user experience.


I think they dont know what standard will win and are not in the gambling mood, because the judgement call between teh competing systems is too close to call.


Can they create themselves a standard? Yep.


Are the confident they can lead on the UE? No.

sarahthomas1011 12/5/2012 | 5:21:03 PM
re: Did Apple Just Kill NFC?

I think we're in agreement that Apple isn't the trailblazer, but it is the company that takes a lot of technologies mainstream. My point was that it could've done the same for NFC. I don't blame them for not including it given the current state of the market, but I maintain that it's disappointing for the ecosystem because it could've kickstarted it.

paolo.franzoi 12/5/2012 | 5:21:03 PM
re: Did Apple Just Kill NFC?

I guess I don't understand why its wonderful to have a card that can be stolen (and acts like cash) or a phone to be hacked to pay my bills wirelessly by waving them at a machine.  Imagine a hacked POS device.


I just think both are just so likely to add to theft that before we get convenience happy that we need to think through the security aspects.


seven


 

Gabriel Brown 12/5/2012 | 5:21:03 PM
re: Did Apple Just Kill NFC?

I'm not convinced about NFC in phones for payments. The new Visa cards in UK have a thing called contactless payment. You touch your card to a machine and pay for goods without entering a PIN.


It some ways it seems better than using a phone to do the same thing. Maybe a phone would be more secure (if you set a password?).


It looks like this:


<img alt="" height="413" src="http://www.standard.co.uk/incoming/article8075673.ece/ALTERNATES/w620/AN7803721NOTE-THE-VISA-CARD.jpg" width="620">

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