Mon 9/10 The iPhone Doesn't Need NFC
The iPhone doesn’t need NFC, and neither do you. Not if you live in the United States, where barcode scanners, and WiFi hotspots are more prevalent at retail cash-wraps than Near Field Communications.
Near field communication (NFC) is a set of standards for smartphones and similar devices to establish radio communication with each other by touching them together or bringing them into close proximity, usually no more than a few centimetres.
NFC allows for contactless data exchange, transactions, authentication, and the configuration of more complex communications such as WiFi. In Europe and Asia NFC is far more prevalent than in the United States, where it is used for everything from train tickets, to social media promotion, and vending machines transactions.
Apple won’t implement NFC in the next iPhone because the technology alone is not a feature. NFC requires a backend to make it work. For transactions it requires a payment system. For ticketing it requires integration with a public transportation or event system. For promotion it requires a social network. Even in Europe and Asia there is not a standard backend for all of these services. With the success of the App Store I just can’t imagine Apple introducing a new technology without controlling the backend, and charging vendors for its use.
Partnership seems out of the question. There are just too many parties at play. Can you imaging a credit card company letting Apple take a percentage of the profits?1 How about the U.S. cellular carrier allowing an up and coming transaction system to operate free of charge on their networks? The only party Apple looks willing to partner with is social networks, and it seems unlikely Apple would alter the development of the iPhone to add a feature that only benefits the Facebooks of the world.
Until there is a need, until NFC is prevalent in the United with a dominating underlying transaction standard, Apple will not introduce NFC in the next iPhone. True, they could roll their own, and base it off of Apple ID, but that would put Apple in competition with Visa, and American Express. It would be easier for Apple to start their own credit card company than it would be for them to install NFC technology at every crash-wrap across the United States. And with Apple’s track record of services2, I don’t think it would be a very good idea.
Apple makes award winning products and software, not the kind of financial services needed to back a NFC payment system. Apple is making the smart move by keeping NFC out of the iPhone. They are buying time as the dominant mobile player, relying on established technology like PassBook, barcodes, and the WiFi Easy Pay system at their retail stores instead of trying to change the world one NFC payment at a time.