We’ve seen some significant advances made in the mobile money game in the last several months, but some news today underscored how this is still a fragmented market that is not advancing at the same rate, nor in the same direction: a report alleges that Apple (NSDQ: AAPL) has already decided that it will not be including NFC in the next iPhone, citing “lack of a clear standard across the industry” as one reason to stay away from the wave-and-pay technology for now.
The news, reported by the Independent newspaper in London, cites sources at several of the largest mobile operators in the UK that have been briefed by Apple about its plans in the area of NFC.
The news strikes an uncomfortable note, though: Apple’s never been a stranger to fragmented markets before. So if the Independent’s story is true, it’s likely that there are other reasons behind the company’s decision to stay away from NFC for now.
This latest report comes as a counterpoint to other news over the last several months that the next major iterations of the iconic Apple mobile and tablet would be equipped with NFC for people to wave their devices at the point-of-sale to pay for goods.
Those reports described Apple’s plan to link NFC payments up with its wider payments ecosystem, currently centered on iTunes and used for non-physical goods like music tracks and apps. Such an overhaul of the service would be no mean feat.
NFC has certainly been gaining momentum from other parts of the mobile world.
In the U.S. AT&T (NYSE: T), T-Mobile and Verizon have banded together to form Isis to coordinate their NFC strategies. In Europe, France Telecom’s Orange has been running a big NFC trial in France and is gearing for full rollouts in different markets in its footprint.
Payment providers like Visa and MasterCard are also getting more involved, and handset makers such as Nokia (NYSE: NOK) and Samsung and are making “NFC ready” phones.
But there is still a question mark over the best way of delivering an NFC service — whether it should be something integrated directly into the device, or sitting on a SIM card, something straddling the two, or even something completely different (dongles, anyone?). All the variations would translate to different parties “controlling” (or at least having a part in) the monetary transaction — a battlefield in itself that has been a big issue for operators in the wake of mobile services, like Apple’s App Store, that disaggregate it from the financial transaction.
And perhaps more importantly for the longer term, there are some that still question how much an NFC service would really get used for purchases anyway, Dean Bubley being one analyst who thinks they will be used more for “interactional” and not “transactional” services.