Friday, April 1, 2011

Will Google Beat Apple’s iPhone 5 To Market With Smartphone NFC Mobile Payments?


Posted: 01 Apr 2011 04:00 AM PDT




iphone 5 versus nexus s for nfc
Will an Android phone like the Nexus S get NFC before the iPhone 5?
At the top of the list for the iPhone 5 is Near Field Communication (NFC) — the ability to “wave and pay” using your smartphone. But will Google’s Android phones beat the iPhone 5 to market in the NFC race?
Business Tech watcher RedHerring, citing a Bloomberg news report, noted this week that Google is close to the testing stage with its prospective near field communication (NFC) “wave-and-pay” mobile payments service for Android devices, which will first be tried experimentally in San Francisco and New York over the next four months. NFC technology will allow smartphone users to swipe their devices over a receiver/reader to effect quick credit card payments, provided their phones are equipped with NFC chips as Google’s recent Nexus S smartphone has been since last December.
Meanwhile, RedHerring unequivocally states that Apple “has abandoned plans to include NFC mobile payments in the upcoming iPhone 5,” suggesting that we most likely won’t see NFC support on the iPhone until 2012, by which time Jupiter Research projects a NFC Mobile Payments volume exceeding $30bn annually, and which will allow Google a substantial headstart in that market. Google CEO Eric Schmidt’s has disclosed that the next version of Android, 2.3, also known as Gingerbread, scheduled to be rolled out in April, will support NFC, although reportedly, the software development kit for Android 2.3 apparently does not yet support either card-emulation or peer-to-peer communication, and Research in Motion co-CEO Jim Balsillie has affirmed that RIM is also working on NFC for future BlackBerry models.
NFC or no NFC remains one of the hottest topics of debate as we wait for the iPhone 5 rollout. I’ve blogged about it a couple of times here previously, and those columns continue frequent forum comments. If it’s true that Apple will not include NFC support in the iPhone 5 — at least in its initial release — a lot of iPhone fans will be disappointed, especially if Android phone users get the capability first. However, The NFC Times’s Dan Balaban reports that according to unnamed sources, Apple has informed to one or more U.S. mobile operators in the Isis joint venture that it will not adopt NFC this year, and an executive at France Telecom-Orange had earlier also expressed doubts about an NFC-enabled iPhone at February's Mobile World Congress in Barcelona, telling NFC Times she was less likely to believe Apple was ready to adopt the technology at the end of the event as she was at the beginning, after talking to sources.
A recent report from market consulting firm Frost & Sullivan notes that the NFC market has moved from the ‘innovator’ stage to an ‘early adopter’ phase and from trial development to the first commercial roll outs, and observes that the key driver for that market will be wide adoption of the NFC solution in mobile phones, cautioning that without a massive number of NFC-enabled mobile phones in use, the market will not be able to realize its immense potential.
The Frost & Sullivan study “NFC – When Will Be the Real Start?” predicts that by 2015, NFC will “clearly be the most-used solution for mobile payment,” and the analysts expect that the total payment value for NFC globally to reach €111.19 billion (equivalent to $155.26 billion at today’s exchange rate) that year, forecasting a five-year NFC compound annual growth rate (CAGR) of 118 per cent between 2010 and 2015. In that context, Android early-adoption and iOS laggardliness will be huge. You’ve gotta’ wonder what the holdup or hangup is for Apple. Dan Balaban observes that based on the information he has, it's not clear what NFC standards Apple believes are lacking, but speculated that if Apple does, in fact, pass on the technology again this year, it might be because in believes NFC is still not yet mature enough to embrace.
What do you think? If the iPhone 5 doesn’t offer NFC capability, will that be a deal-breaker for you? Will you defect to an Andriod phone, like the Nexus S? Let us know what you think!