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. 

Conclusion

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.

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49 Comments

52. molanjames

Posts: 80; Member since: Oct 11, 2012

Honestly NFC's would likely lead to a lot of hacking if they were wide spread. That's why apple chooses to go a different way. The expansion of the technology could just as easily go the passbook way. The best technology will be adopted for everything in the long run. For now it's prolly best that we try a few different methods and let people decide what they like better.

55. xfire99

Posts: 1207; Member since: Mar 14, 2012

In which way are others methods safer then NFC? Even credit cards payments is safe and it even need any wireless transfer. But is it safe?

46. xfire99

Posts: 1207; Member since: Mar 14, 2012

Not only apple refuse to implent NFC, banks, ISP are using there own way for mobile payment and all want a piece of cake with theirs own solution for mobile payments.

42. TheRetroReplay

Posts: 256; Member since: Mar 20, 2012

You guys here at Phone Arena DO realize that companies are waiting for the most popular phone in the world to have NFC before the pour money into getting NFC readers right?

45. networkdood

Posts: 6330; Member since: Mar 31, 2010

Android OS is the most popular - APPLE really only owns America...and a few other countries.

49. jroc74

Posts: 6023; Member since: Dec 30, 2010

Call me crazy...but the phone thats used by the most ppl, has the biggest marketshare would be considered the most popular from a retailers stand point. You are looking at it from another point of view.

50. networkdood

Posts: 6330; Member since: Mar 31, 2010

true, I was looking at it from the OS view and not phone view...that is because Android is more than just one phone from one manufacturer.

51. rusticguy

Posts: 2828; Member since: Aug 11, 2012

With or Without Apple NFC will forge ahead. Apple will have to incorporate it into their devices not by choice but by force (of market) ...

35. jroc74

Posts: 6023; Member since: Dec 30, 2010

What I dont get is....how are these ppl gonna assume that if it was in iDevices, ppl were gonna use it? Are they really saying that Android users dont matter for advancing tech? The iPhone not having LTE until later didnt hurt LTE. Ok...reading some more comments...I guess its a chicken and the egg scenario...maybe retailers would put more resources into NFC if the iPhone had it. But even retailers have to know Android phones are damn near everywhere. Thats no excuse.

34. rusticguy

Posts: 2828; Member since: Aug 11, 2012

Apple enjoys negative Publicity (also)

41. MichaelHeller

Posts: 2734; Member since: May 26, 2011

All press is good press

54. JunitoNH

Posts: 1946; Member since: Feb 15, 2012

Ignorance is bliss, there isn't such thing as bad publicity.

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.

33. MichaelHeller

Posts: 2734; Member since: May 26, 2011

Why would I blame Apple in that scenario? I blame retailers for ignoring all of the people that already have NFC, but can't use it.

38. TROLL

Posts: 4851; Member since: Apr 13, 2012

We shall not worry, it takes time, and this NFC will be the latest trend,

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?

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.

19. networkdood

Posts: 6330; Member since: Mar 31, 2010

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

17. GuiltyBystander

Posts: 199; Member since: Mar 05, 2012

I blame Dinkleberg.

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....

37. TROLL

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 NFC...my Jack in the Box uses it now.

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.

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.

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.

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

* Some comments have been hidden, because they don't meet the discussions rules.

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