Analyst blames Apple for slow NFC growth, we blame limited use

This article may contain personal views and opinion from the author.
Analyst blames Apple for slow NFC growth, we blame limited use
We've remarked before that NFC, while it is an incredibly useful product, hasn't seen the kind of adoption rate that many have hoped for in the United States. And, one analyst thinks that Apple is to blame for the slow growth of NFC. We can't agree that Apple is solely to blame, but it's hard to argue that it isn't at least part of the problem. 

Juniper Research analyst Dr. Windsor Holden has said that NFC growth forecast likely won't get to the $180 billion mark by 2017, and that $110 billion is more likely. This, according to Holden represents a "two year lag" in NFC adoption projections for North America and Western Europe. Holden claims that Apple’s decision to not include NFC in its iPhone 5 is “a serious blow for the technology” making it “even more difficult to persuade consumers – and retailers – to embrace what amounts to a wholly new means of payment.”

We think that's a bit hyperbolic. Sure, Apple's iPhone does still make up around 50% of the smartphone market, meaning NFC is missing out on millions of devices, but we never expected Apple to add NFC anyway. Android has been making up a larger proportion of shipments, and steadily outpacing Apple in sales for a while now. And, the fact is that there are only a handful of Android devices that have NFC built in. 

The fact is that NFC has been successful, just not in North America or Europe. NFC has been used widely in Japan for a number of different things, and has been a successful technology in the region since before the iPhone or Android even existed on the market. 

NFC uses are still too limited

NFC isn't yet a standard for smartphones, and that's because the NFC infrastructure hasn't been built out enough yet. What good would having NFC in the iPhone be if the only places you can use NFC are McDonald's, 7/11, and some pharmacies? As yet, the American people haven't been shown the real value behind NFC, because it's use case has been limited to mobile payment systems, which are up to the credit card companies (which control the card swipe machines at all stores) to upgrade. 

It's a vicious cycle where payment systems aren't upgraded because not enough people use NFC, and not enough devices have NFC, because there aren't a lot of uses for it in our region yet. NFC can't be a replacement for your wallet if the only thing it replaces are credit/debit cards. We need to see more adoption for other uses like you see in Japan, where NFC in phones can replace your public transit card, your library card, and other membership cards. It can store your medical history making for easier trips to the hospital with less paperwork. NFC can replace paper tickets for movies, and travel. 

NFC can also act as part of the augmented reality system. We saw Google giving out NFC tags for businesses a couple years ago, and that's an idea that died completely. There's no reason why historical sites, or even just advertisements, or businesses can't have NFC tags embedded that bring people to a website with more info, or videos, or anything. 

Beyond that, there is trouble with compatibility between NFC devices. NFC chips in various Android devices - Samsung, HTC, Nexus, etc - can't even always communicate between each other because manufacturers change the core Android Beam. And, that's just within the Android community, and doesn't take into account how Windows Phone, BlackBerry, and other platforms handle NFC transfers. 


So, sure, the NFC growth rate may be slowed a bit by Apple's decision to not include NFC, but the real problem is that companies still have too limited a view of what NFC can do, and how to best market it. There are very few times when people have any use for being able to tap phones together to share things. That can already be done in so many other ways that features like Android Beam or S Beam are little more than gimmicks, and can't always work together. Mobile payments makes the most sense, but that's not all that NFC can do, and the sooner companies realize it, the sooner we'll see NFC added to more and more devices.



2. ultimatebatman

Posts: 52; Member since: Dec 04, 2012

So basically it shouldn't be in the phone because it isn't common enough yet? If Android used the same logic, carriers would not have bothered with LTE. Basically, here is the order: Android pioneers, Apple adopts only once Android laid the foundation, Apple sues

4. MichaelHeller

Posts: 2734; Member since: May 26, 2011

1) NFC was around well before Android. As stated, NFC is huge in places like Japan, and has been since before Android or the iPhone launched. 2) Not saying it shouldn't be in the iPhone yet, but Apple doesn't tend to adopt technologies until they are proven and have had time to mature. That's why Apple was late putting DVD into computers, and LTE into its mobile devices. So, if the NFC infrastructure doesn't get built out (regardless of Android), Apple might not put it in the iPhone. And, a big problem with building out the infrastructure is that people have a very limited idea of what NFC can be.

6. lzsbleach

Posts: 155; Member since: May 20, 2012

So Apple is not really a company that will bring something new to the market but they improve on products that have been proven or have huge potential to succeed. I think this one track mind of doing things like this can be very detrimental to them as they can be left behine. I think companies that are on the verge of dome always come up with the best products and push for innovation because its all or nothing; look at Nokia

9. MichaelHeller

Posts: 2734; Member since: May 26, 2011

Apple will try to improve upon existing products. That's been the same business model for plenty of companies. The rewards may not be as big if you don't risk as much by pushing innovation, but a company can still be plenty successful.

13. lzsbleach

Posts: 155; Member since: May 20, 2012

Doesnt that also depend on what type of companies are in the market to? Apple plays it safe but Google takes more risk and pushes for innovation more and I guess its because they have so many different things going on, that they cant lose. This innovation that Google is pushing wouldnt that put pressure on apple's products as they are the ones that are playing catch up? Consumers are becoming more aware of whats going on in the market too.

15. MichaelHeller

Posts: 2734; Member since: May 26, 2011

Doing too many things can be just as bad as doing too little. There's a reason why Larry Page killed off a lot of products when he took over as CEO. Every company has to find it's own balance. Google pushing something doesn't guarantee success any more than Apple pushing it would. Products succeed when consumers see the value in it, and that hasn't fully happened for NFC.

31. Nadr1212

Posts: 741; Member since: Sep 22, 2012

Can't analysts just stop blaming and mentioning Apple for everything? EVEN THOUGH it totally deserves the blaming part

3. imkyle

Posts: 1115; Member since: Nov 18, 2010

You nailed it PA.

5. RamyRamz69

Posts: 390; Member since: Dec 12, 2011

NFC is extremely useful. I use it on my Xperia Ion each and every single day whether it's Smart Tags, Beam or speakers. It just needs more marketing, it makes life much more simpler...

7. mnp188

Posts: 19; Member since: Apr 27, 2012

Ahhh... there we go again. This is where I hate phonearena - defending apple in the title itself. I agree... your point is valid. But you don't have to prove apple innocent in the title itself.

11. MichaelHeller

Posts: 2734; Member since: May 26, 2011

Not defending Apple or trying to prove the company innocent. In fact, I'm flat out saying that Apple is somewhat irrelevant in the whole thing. As I've said many times, if you come looking for bias, you'll probably find it somewhere, even if it doesn't actually exist.

47. anshul0000 unregistered

you have a soft corner for apple..

48. MichaelHeller

Posts: 2734; Member since: May 26, 2011

The idiom is a "soft spot", but really I just don't completely hate the company. I don't personally like Apple products, but I'm not going to judge those who enjoy them. And, while I will freely admit all of the bad practices of the company, I'm not going to ignore that it has been extremely influential in tech over the years.

8. kirholstov

Posts: 146; Member since: Jun 28, 2012

iOS doesn't have even a Bluetooth sharing option, if it will have NFC, I think that situation won't be better

25. Valdomero

Posts: 677; Member since: Nov 13, 2012

Perhaps that's the reason why they don't adopt NFC yet, they may be figuring out how to only allow NFC to Apple products. Just like their bluetooth...

10. kellkeezy

Posts: 57; Member since: Dec 17, 2011

@michaelheller and @imkyle Nailed it completely, apple has always been known to adopt technology into their business for years. @ultimatebatman Just to let you know the patent office is what allows a company to own the ideas, which are sold by people or intellectual properties within a company or freelance. Lawsuits from one company to another is the equivilent of dogs pissing in a park.

12. RapidCat

Posts: 351; Member since: Jun 12, 2012

nfc not only for payment. look what google does with Android Beam, easy transfer file. without pairing like bluetooth. or sony with nfc tags. without company like sony and google maybe nfc still stuck with payment.

14. roscuthiii

Posts: 2383; Member since: Jul 18, 2010

Nicely done again Michael. Sheesh, I'm starting to feel like K.I.T.T. here with all the, "Well done Michael"s. Do a crappy write up for once so I can lambaste you a bit. ;-) What it seems to all come down to here is that companies are beholden to shareholders so much that no ones willing to pull the trigger. No one wants to take a gamble without some kind of guarantee-able return of investment. Which is kind of an oxymoron. I guess this is where Apple does come into play. Forgoing all the other pros and cons that can be said of Apple, they were at least willing to stand up and say, "Oh yeah?! Well... Screw you, we're doing it anyway!" It's not enough for someone to dip their toe in to test the waters... someone's gonna have to take the plunge to show NFC as a viable profit generator.

23. mrochester unregistered

When Apple innovates it tends to be something huge that the entire industry falls over themselves to immitate; iTunes, iPod, iPhone, iPad. This is usually because Apple puts decent amounts of time, money and effort into making these product get off the ground and be widely adopted. If anyone has a track record of taking an idea and putting enough oomph behind it to get it going, it's Apple, which is probably exactly what the analyst in question is referring too. I should imagine NFC will continue to bob along the ground until Apple get the infrastructure and agreements in place to make it a viable venture.

16. Slammer

Posts: 1515; Member since: Jun 03, 2010

In your conclusion Michael, you do claim Apple is somewhat responsible. I respect that and I can't really disagree here. I do tend to justify the analyst's opinion more however. The business and education enterprises have begun to heavily adopt the Apple platform. This then trickles down to business people and students having to invest in the platform as well. These two areas of interest and its extensions, are the ones that would benefit the most out of NFC. Business travelers and students that don't carry large sums of cash. It is said that if you build, they will come. If Apple does not include it for the more dependant consumer base , it will come slower. So, I have to believe that the analyst is not really far off base. My beef is that this is the problem with waiting and relying too heavily on Apple. Sure, they are a focal point for tech, but it delays moving forward. You can't fine tune unless you get everyone involved with the technology. John B.

20. networkdood

Posts: 6330; Member since: Mar 31, 2010

America is slave to the APPLE....


Posts: 4851; Member since: Apr 13, 2012

Very well said. Cause it's there country's pride and joy, also there are heavy investments and shares on Apple!

53. JunitoNH

Posts: 1946; Member since: Feb 15, 2012

Now, that my friend, is a clever and true statement. I rather see Apple succeed, and shares go up. I can care less what happens to Samsung from an investor point of view. I can always get an Android device, even if it is from GM.

24. mrochester unregistered

Although the problem might be people relying too heavily on Apple, the actual issue is that there isn't anyone else who seems to be able to do what Apple does. Google are currently the best placed to make NFC big but haven't really seemed to put as much effort behind the tech as they could have. Where are the agreements with Visa, Mastercard and transportation providers to use Android as a payment device? There are so many possibilities currently sitting unrealised.

44. networkdood

Posts: 6330; Member since: Mar 31, 2010

It is out there... companies are taking their time with Jack in the Box uses it now.

17. GuiltyBystander

Posts: 199; Member since: Mar 05, 2012

I blame Dinkleberg.

19. networkdood

Posts: 6330; Member since: Mar 31, 2010

I am surprised that APPLE has not owned a patent on NFC tech, yet.

21. nwright94 unregistered

When I did use a device that had NFC, there was nowhere at all to use it in southwest Michigan. My brother hasn't used it once on his s3 and he's had it since launch day. It's just something that hasn't caught on in America yet, but like any other thing in the tech world, everyone's so quick to blame Apple. I've even seen some people blame apple for mobile malware. People just like to complain and always try to justify their complaining by blaming a company that usually has nothing to do with what they're complaining about.

26. CMonster

Posts: 7; Member since: Dec 04, 2012

How would NFC be any more practical than using an app like Voxer? The only difference is that one goes over the network and the other goes directly from one phone to another. I guess with Voxer you have to know of the phone you are attempting to contact, but isnt that almost the same as knowing what frequency to be on using NFC? When it comes to data transfer like S-Note or picture sharing, I could potentially see the use, but who are you really going to share something with that you wouldn't mind also having his/her number?

29. downphoenix

Posts: 3165; Member since: Jun 19, 2010

I blame Apple, because everyone likes to cater to them. Until the iphone has an NFC chip in it, a lot of retailers wont really care about NFC. When Apple puts a chip in the iphone, a lot of retailers will care alot about it.

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