Apparently NFC Takes Off – but Where is it Going?

According to Berg Insight smartphones with NFC chips in them increased by 300 percent in 2012.

Excellent. 140 million of them were shipped and Berg thinks that by 2017 there will be a billion units out there.

So, that means that NFC is a success, right?

No.

I have always been cynical about NFC, mainly because we were lead towards a single application for NFC – payments. I still remain skeptical about the success of NFC and a large part of me believes that it is a solution to problems that does not exist.

By now we should be awash with pleased press releases about the success of ISIS. Instead, there is a slightly damp silence. I did see a press release a few months ago that told me that ISIS was a great success on public transport in Salt Lake City. Which is great, but many cities of the world have contactless transport cards, which work very well. Meanwhile the major credit cards are developing and actively promoting their own contactless credit cards. And while retailers are wondering whether to switch terminals to adopt NFC, companies such as PayPal are busy innovating and offering retailers a payments platform that does not need any infrastructure or expensive terminals.

All of which narrows the number of applications where NFC can make a difference. So, instead of being the glue that binds the whole information, shopping and check out experience together – and more – it is increasingly looking as if NFC will be the thing that fills in the gaps where there are no applications already in place.

As a case in point, Orange ran a competition to find the best application for NFC. And the winner? A shopping sensation? An advertising adventure? A retail revolution?

No, the winner is an NFC enabled game, with the runners up being an anti counterfeiting application (possibly a great application but there are others) and the third place going to a teenage survey site.

Conclusion – just because shipments of smartphones with NFC chips in them has increased by 300 percent (from a low starting point) it does not mean that NFC is a success. Unless some game changing applications appear pretty soon, NFC chips might just remain asleep in our phones.

We stick with the results of our survey from last year.

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Alex Leslie
About Alex Leslie 400 Articles
Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet.

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