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Apple Signals NFC a 2012 Event

By Mercator Advisory Group
March 14, 2011
in Analysts Coverage
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pay taxes design, vector illustration eps10 graphic

pay taxes design, vector illustration eps10 graphic

Most everyone has been expecting Apple to announce inclusion of NFC chips in the iPhone 5, due out (if history repeats itself) in early summer. But this news report strongly suggests that Apple is taking a pass on NFC deployment in 2011. To understate it, that’s significant. It suggests at least two issues are in play. First, Apple has not settled on a way to monetize NFC capabilities. Rumors have swirled for months that Apple’s interested in its own payments network, but that’s a major effort and line of business departure. It’s no wonder the Cupertino firm might hesitate. Second, how NFC chips are managed and who does that remains very much in flux. It may just be too much to accomplish given the short time between now and the next iPhone refresh.

If this news is indeed true, it leaves open an opportunity for the Google Android team. While Google does not make handsets or control that supply chain, it has made NFC a major initiative. If Android handset makers are adding this chipset and Apple is not, it could give the Android ecosystem a head start. As the world’s largest advertising platform, Google is really interested in those revenues, and not the payments-based ones, for the mobile channel. If Google can convince handset manufacturers of Android phones, then we’ll see that capability first in the Google ecosystem. Based on the nearly unanimous set of NFC announcements for new Android phones at Mobile World Congress, that much seems assured.

Sources at several of the largest mobile operators in the UK revealed Apple had disclosed in meetings that it would not be including Near Field Communication (NFC) technology – which enables payment for products with a wave of your phone on a reader – in the latest version of the iPhone, be it the iPhone 4GS or the iPhone 5.

One source close to the discussions said: “The new iPhone will not have NFC, Apple told the operators it was concerned by the lack of a clear standard across the industry.” Yet Apple is understood to be working on its own NFC proposition, which would link payments through iTunes. It hopes to introduce the technology in a handset likely to be released next year.

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