Mobile NFC growth scaled back


Only to hit $110 billion in transactions by 2017 as iPhone 5 omits chipset, although Japan and Korea maintain momentum

Forecasts on growth estimates for the global NFC market have been revised and significantly scaled back regarding the North American and Western European markets, one research firm said today.

Juniper Research's report claimed that by 2017 the proportion of NFC-enabled smartphones will be only marginally below previous estimates. Yet global NFC retail transaction values are now expected to reach $110 billion in 2017, significantly below the $180 billion previously forecast.

According to the report, Apple's decision to omit an NFC chipset from the iPhone 5 has reduced retailer and brand confidence in the technology, leading to reduced point of sale (POS) rollouts and less NFC campaigns. This in turn will lead to lower NFC visibility amongst consumers and fewer opportunities to make payments, threatening a cycle of 'NFC indifference' in the short term, Juniper said.

'While many vendors have introduced NFC-enabled smartphones, Apple's decision is a significant blow for the technology, particularly given its previous successes in educating the wider public about new mobile services,' said report author Dr Windsor Holden. 'Without their support, it will be even more difficult to persuade consumers – and retailers – to embrace what amounts to a wholly new means of payment.'

The report found that Apple's move would impact most dramatically on markets in North America and Western Europe, where transaction values would exhibit a two year lag on previous forecasts as retailers delay POS investments.

Conversely, retail transactions in NFC's heartland in Japan and Korea are likely to experience little or no impact from the decision. Juniper also observed that lower than expected adoption of Google Wallet allied to a delayed launch of the ISIS NFC project in the US would also have a negative effect on that market.

The report also found that despite Apple's decision, NFC trial consumer feedback at venues such as the London Olympic venues and in Singapore has been extremely positive, suggesting strong latent interest when services are more widely deployed.


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