OPINION: Apple's control over NFC future is overstated

Andrew Davis
By Andrew Davis | 28 August 2013
Tapit chief operating officer and co-founder Andrew Davis.

Two weeks out from a new iPhone release and we’re seeing and hearing thousands of discussions about Apple and if they will include NFC within their new model, iPhone 6.

Let us start by saying the chatter generated around Apple including or not including NFC is fantastic for everyone involved within the NFC ecosystem. Regardless of whether the chatter is negative or positive, it is helping drive broader awareness of NFC to business and people on some of the use cases where NFC can make a significant and positive impact to society, the most obvious being around payments as well as other emerging NFC services.

All of us here at Tapit are really upbeat about Apple and their plans for including NFC however there is an opinion held by some who believe that if Apple doesn’t include NFC it will spell the demise and eventual death of NFC as a technology. Quite simply, we think this is plain wrong.

If you currently share the opinion that Apple not including NFC will signal the death of the technology then you have come under the spell which we refer to as the “Apple reality distortion field” and there is a responsibility to educate people on why it won’t stop the momentum of NFC-based services.

Let’s start with some facts. Every device manufacturer other than Apple continues to install NFC in their new models, remembering that Apple accounts for around 15-20% of smartphones globally while the handset vendors that include NFC such as Samsung, HTC, Motorola and Microsoft make up the remaining 80-85% of the global market.

The point here is that Apple is a minority player (yes, this isn’t a typo, Apple is a minority player) on the global stage when it comes to user base, so it’s quite naïve to think just because Apple doesn’t have NFC-enabled devices, that this will in some way impact the huge install base already equipped which grows exponentially every day (according to the latest ABI research figures the number of NFC-enabled devices globally stand at 300 million with 500 million forecast for 2014).

If anything, it should reinforce how Apple continues to fall behind the innovation curve at the expense of Samsung and others in the smartphone arena in which it was once dominant.

It is also important for people to understand the use of NFC-based services isn’t a question of coming soon, it’s already here and we’re not talking about small trials or pilots, we’re talking about significant roll-outs which has seen hundreds of millions invested in deployment.

One example is Isis in the US, the mobile wallet venture between T-Mobile, AT&T and Verizon. Following on from a pilot earlier this year, Isis has announced it will, this year, be rolling out nationally so people can begin paying for stuff using their phone at over 1 million NFC-enabled point-of-sale terminals.

Major institutions, brands and retailers are involved in the Isis deployment which indicates large industry players aren’t concerned with iPhone and their plans for NFC. Why? The big end of town recognise majority wins and they will gravitate towards a majority user base. If Apple decide to use an alternative method of paying on their phone, then they will offer them the ability to use that method on the provision that it doesn’t compromise the majority-based method.

However, what the big end of town won’t do is bend its methods to suit a user base that is in the minority especially when the big end of town includes telcos, financial institutions, retailers, point-of-sale terminal manufacturers, handset vendors, trusted service managers and more.

You must recognize and acknowledge that when it comes to payment-related services, there are a diverse range of stakeholders involved, many of which aren’t wedded to Apple and some who will enjoy the opportunity to push a payment/services method which limits Apple’s scope to influence consumers.

So while you should be very excited about the upcoming release of the new iPhone and the possibility of NFC being included, like everyone at Tapit, please don’t quickly jump to the conclusion that Apple are controlling the destiny of NFC, that’s something which is beyond the spell of Apple.

Andrew Davis
Chief operating officer and co-founder
Tapit

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