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Summary:

As expected, Apple passed on NFC for the iPhone 5. Apple could have provided a big boost to the technology and helped educate users on the merits of the technology. Now, it will continue to struggle to gain mainstream acceptance.

NFC

UPDATED: As with most of the rumors about the iPhone 5, Apple’s decision to forgo near field communication (NFC) for its latest smartphone proved true as well. It’s not surprising though it deals a setback to the short-range wireless technology, which is still waiting for its breakout moment.

Apple had plenty of reasons not to include NFC. With its focus on getting the device as thin and light as possible, adding an NFC chip would have been that much more of an impediment. And more likely, Apple is not convinced now is the time to adopt it. While we’re seeing NFC appear in more high-end phones, like the Galaxy S III and Nokia 920, consumers don’t have many applications and use cases for the technology and merchants still need to make more investments in hardware to handle NFC payments.

We’ve suggested that Apple could be a big catalyst for NFC and mobile payments if it embraced the technology. Equipping the most popular phone with NFC would have a been huge education moment for consumers and a big validation for NFC. Developers could also get on board and create some really interesting apps with Apple’s encouragement. And with its upcoming Passbook application in iOS 6, which aggregates tickets, loyalty and pre-payment cards, Apple could have an easy way to apply NFC technology in the iPhone 5.

Startups like LevelUp, a mobile payment and loyalty company, were hoping that Apple would include NFC, with LevelUp going so far as upgrading its payment terminals just in case. But now, there’s going to be more grumbling that NFC is still a technology in search of a problem.

As we’ve said earlier, NFC is much more than just payments and can facilitate personal media and information sharing, building access, marketing and easy Bluetooth pairing. Google, BlackBerry, Nokia and Samsung have all shown different ways in which NFC can be used. But without many common applications that can work between those devices, there’s fewer chances for people to really adopt the technology. With a new iPhone likely to be a best seller, there would have been a lot of ways for people to get acquainted with NFC-actions. Now, the promise of NFC will still struggle to be fulfilled for at least another year.

UPDATE: Apple’s senior VP of marketing Phil Schiller said in an interview with AllThingsD that NFC was still not necessary to fix any specific problems or provide functionality that wasn’t already available. “Passbook does the kinds of things customers need today,” he said.

  1. Thank you for such a cleanly written story.

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  2. Let’s not Hype up this NFC thing,
    Are all big three Credit card guys are really behind this NFC thing?

    If they are then I want hand set to be really secure, which it is not today. This is why your friends at fruit company bought Authentec.

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    1. I might not use it for cc payments but for transferring apps between phones, connecting them for multi-player games, connecting devices such as speakers and headphones, coupons. NFC is already in magazines for advertisements on products or links to video. Its really a great standard.

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      1. Bluetooth?

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    2. You really believe that?

      Apple doesn’t want NFC because they are trying to set a standard. NFC is “Near Field Communication”. You have to be in very close range and it’s as secure as a Credit Card with a PIN in your wallet and it’s here to stay. And before anyone makes a comment about that, nothing is absolutely 100% secure ;)

      Not to mention there is more to NFC than just payments. Take a look at the JBL NFC Speaker for Nokia’s soon to be released Lumia 920. Just tap the speaker to start playing your tunes. Windows 8 also supports NFC. Tap a W8 device and transfer your pictures, start a multiplayer game, transfer information….Hardware and Software possibilities are endless….Everyone is going NFC and there will be many more uses for it….unless of course you own an iPhone.

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  3. Ryan, you’re right! I am going to buy a Galaxy S III today because I use the NFC capability in my mobile applications. I was hoping for iPhone 5 to have the NFC technology and would have bought that phone. As NFC becomes more prevalent as a payment and app option, people like me are going to buy Android NFC devices just for that capability.

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  4. Although I’m not an Apple fan I was really looking forward to the iPhone 5 and its ability to quickly standardize the industry with NFC. Sadly it will be off to a much slower start. There are so many things you can do with NFC not just cc payments. Microsoft and Google really need to hype these features.

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  5. Ryan,
    If apple sticks to it’s “tic-toc” type release cycle, it will most likely be two years before we could see NFC in an iPhone. This assumes the. Ext iPhone a year from now is a 5′S’, with no change in the basic hardware design.

    Also, what can you do with NFC that can’t be accomplished with Bluetooth and using a standard scanner and QR/bar code (like how the Starbucks app works to make payments)????

    Not trying to troll, just curious what is special about NFC? I’ll do a little research in the mean time.

    Thanks- Argosy

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  6. The lack of NFC support on the iPhone doesn’t affect the rollout of NFC. There’s no consumer demand for it. NFC technology has been available for many years, without requiring a device. Credit cards can have NFC embedded in them. The technology isn’t gaining traction because it doesn’t fill any needs. At best it is a gadget technology for now, looking for a purpose

    Cheers !

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  7. Reblogged this on MyRetailCloud Blog and commented:
    Pity Apple didn’t come to the party with NFC in the iPhone 5 as that would have driven the innovation from app developers and given the mobile payment market the impetus it needs. Passbook, as useful as it will be in iOS 6, will not be enough to cover mobile payment requirements.

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  8. i think iPhone 5 should likely more better than iPhone 4 to capture the consumer.
    http://technologybdtoday.blogspot.com/

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  9. No one including Apple can stop technology.

    NFC will move forward along with Google and Microsoft while Apple and it’s iPhone 5 users staying behind.

    Apple can say what they want but the only reason they didn’t put in NFC is because they are trying to own a standard rather than be part of one.

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  10. It’s a pity actually. Mobile payment is certainly a mass population application of NFC, but the thrid party beneficiary are the little niche applications. Smart Buildings and Workplace ICT would work so much better on NFC rather than waiting for advancements in position sensors that are really expensive and not yet precise.

    For me, the iOS is looking less and less like a device that is fit-for-business. Microsoft still dominate the workplace and this move leaves a little more territory for them to leverage that advantage. I have an iPad and an iPhone and use them for business, kind of… They fit clumsely into the workplace and I am jealous of the Galaxy S III and Lumia users.

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  11. Apple buys mobile payment technology and company :)
    Ready in Bluetooth 4.0 (Low Energy) mobile payment technology and integrate it into its Apple solutions.
    HP opinion on ROLLPAY / Rolling Mobile Payment: “That the present and future technology, payment by means of mobile telephones, ROLLPAY A New Way To Pay…”

    http://h30565.www3.hp.com/t5/Feature-Articles/The-Future-of-Bluetooth-What-It-Can-and-Can-t-Do/ba-p/1296
    Application ROLLPAY technology in the iPhone 6…

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  12. I don’t understand the hoopla around NFC and mobile payments. Being able to leave your phone in your pocket vs. swiping over an optical scanner is no big advantage.

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  13. It’s telling that the absence of NFC on the new iPhone 5 hasn’t been much of a surprise to those of us who have observed Apple’s progress in this area. It would have been great if Apple had included NFC; but is that really going to obstruct the march of NFC? I don’t think so.

    The vast investment in NFC mobile contactless payments and services is not going to wane. And with the NFC-enabled Android, Windows 8 and RIM handsets dominating the smartphone market NFC is going to progress at a pace without Apple. This could be Apple’s loss.

    Global brands such as MasterCard, Visa, Barclaycard, Orange and Google have committed, and will continue to commit. millions on developing NFC capabilities.

    iPhone users will also miss out on another big benefit of NFC which is the ability to interact with marketing campaigns that use NFC tags embedded in posters and product packaging. This sort of activity will initially drive the use and demand for NFC services before payments take off as mainstream.

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  14. After using NFC to make payments at my local grocery store and the coffee shop near my office, all I can say is I love when I can pay without having to swipe the credit card physically. I just “flash” it near the reader and the payment is done. Now, the world will simply wait for Apple to adopt NFC, and then suddenly NFC becomes a futuristic technology capable of changing our lives.

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  15. This is standard Apple M.O: Wait for the pioneers to botch it, learn from their mistakes, then get it right and enter the market. I also agree that NFC for payments is nothing more than a solution looking for a problem.

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  16. There’s a lot of talk about Apple missing the boat on the many promises of NFC, particularly when it comes to mobile payments. And, I certainly believe NFC will make it onto the iPhone eventually. In the meantime, innovation is still happening when it comes to mobile retail transactions. Consumers are constantly looking for other ways their mobile phone can make their shopping experience more convenient and developers shouldn’t sit around and wait for NFC to make this happen. (indeed shouldn’t tie directly to a particular technology) One area that’s evolving when it comes to retail transactions? The receipt. Whether your smartphone is NFC-enabled or not, you can now use a mobile app to get a digital receipt zapped directly to your phone. No more dealing with the hassle of paper receipts.

    Cheers,

    Dinesh C.
    Proximiant Inc.

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  17. BluStor is coming

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  18. NFC for me was never a deal breaker for me, I had it in several phones already and rarely used it since its not well implemented in the US market. However, Apple’s choice to skip NFC because it would make the thinner iPhone not as thin is a poor excuse. The iPhone 4/4S was pretty thin already and with the new display technology they reduced it a bit already. They could have added it and made it dormant for a later adoption point. Of course we all know what it really means is when and if Apple does support it they will expect users to just buy a new iPhone, and users will even if that means iPhone Gen 7 is the one (next year).

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  19. IPhone 5 made a big mistake not employing NFC. We are all waiting for payments to happen in couple of years time but marketing initiatives can happen now. The elephant in the room is that the handset manufactures that have the capability don’t shout about NFC and the average consumer doesn’t know about the potential of NFC. If they did, MNO’s would be adding value left right and center to sell their packages. E.g. There was a big campaign in the UK where Orange teamed up with a food chain that had NFC poster promotions near tills. Tap for free food if you have an orange phone. If Samsung, Nokia, RIM started promoting NFC and how it can be used in every day life except payments as its not ready yet then ad agencies would jump all over it creating demand. Before you know it people will be tapping for all sorts of physical media to get things.

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  20. Can someone at Gigaom do us a favor and explain exactly why NFC is differentiated from Bluetooth IV. I don’t want yet another battery sucking radio with additional antenna complexity. Can’t Bluetooth be powered down to reduce its range to be equivalent to NFC? I also agree that this will be a security nightmare without 2 factor authentication such as fingerprint or iris scan. It will have to be better security than credit cards currently provide. Also adding mature Bluetooth tech to existing terminals should be a much cheaper retrofit than starting from scratch with new NFC hardware.

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  21. Apple was right to leave NFC out, NFC is security nightmare and a Eastern European hackers dream, besides the current crop of copycat companies Samsung can carry the the football solve the problem and be a hero.

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  22. So just because Apple is falling behind means that customers do not want it? There are an estimated 100,000,000 smartphones that do have it. A millions more are shipped every week. This news simply means that Apple is no longer an industry leader. Shortly it will become just another company playing catch up.

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