The pieces are falling into place for near field communications to take off over the next few years, according to a new forecast from Juniper Research, which estimated one in five smartphones will support the short distance wireless technology by 2014, with 300 million NFC-capable devices available by then. The new figures are more bullish on NFC than a previous Juniper forecast in late 2009, which estimated one in six mobile users will use NFC by 2014.
Juniper said the increasing momentum behind NFC, with a stream of vendor and carriers announcements in recent months, is helping boost the prospects of NFC. North America will lead the way, according to Juniper, with half of all NFC smartphones by 2014. France, in particular, is off to a quick start, with 1 million NFC devices expected this year.
But the NFC ramp-up will still faces challenges. With so many players involved, from merchants, operators, manufacturers and web giants like Google (s goog), service complexity will be an issue. The industry also needs to work out business models around NFC while ensuring strong security for consumers unfamiliar with the concept of a mobile wallet, said Howard Wilcox, the author of the report.
Wilcox said the bigger revenue opportunity per user is not in NFC payments, but through retail shopping opportunities such as coupons and smart posters that offer product information. That lines up with what we’ve been writing about lately, that NFC, while it’s framed as a payment story, offers much more in the way of targeted marketing. That will give merchants more reason to jump on board with NFC, and if done well, with relevant coupons, discounts and offers, it could spur on adoption with consumers.
It will still be a little slow this year with NFC, as hardware starts rolling out and carriers, banks and others work through final testing and small deployments. Merchants will need to also upgrade to NFC capable readers. But increasingly, it looks like the NFC boom is not a matter of if, but when at this point.