04 January 2013 ~ 1 Comment

Why 2013 will NOT be THE year for NFC

 

 

by Robert P. Sabella

Around this time of year we usually see a plethora of articles proclaiming that THIS is the year for this or that technology.  NFC is no different. And for those of us who have been around the technology for some time, we are used to it—perhaps a bit bemused and even in some cases, slightly irritated.

Contrary to much speculation, though it may be a very good year, 2013 will NOT be the year for NFC. Next week, I  will follow up with an article elaborating upon why 2013 will BE a very good year for the technology.

Why won’t 2013 be the year for NFC?

  • Availability: Simply stated, there are just not enough devices—smartphones, tablets, etc., including Apple’s iPhone—that have NFC capabilities.
  • Acceptance: Though there’s been an increase in use, full-blown deployment of mobile payments is still lagging.
  • Awareness: There is a general lack of education about near field communication in the marketplace at this time.
  • Infrastructure: There are still technical idiosyncrasies and limited NFC components that prevent the applications from being absolutely seamless.
  • Authority: The industry still has yet to produce enough real, compelling use case studies and make a large enough penetration into the market.

Lack of Availability

Not enough devices are NFC-enabled, most importantly, the Apple iPhone.

Even though companies like Samsung are selling a substantial amount of NFC devices, we are still some way from creating enough penetration for mass adoption. With the mobile network operators aggressively pushing smartphones with NFC capabilities, this will change soon … just not likely in 2013. Apple rumors around NFC in the iPhone 5S or 6 are swirling again; but I am not that concerned about Apple this time around.  I think the market has already discounted that. The reality of the matter is that there are far more Droid users than iOS users at this point in time, and with devices like the Samsung Galaxy S3, consumers actually have a legitimate alternative. BlackBerry users who are leaving their BlackBerries behind in droves are not all just getting an iPhone as they did the in past; many are choosing options like the S3.  And even when Apple chooses to implement NFC, we know it will probably be in some type of convoluted proprietary system that will thwart the whole idea of NFC open standards.  So I think Apple may have ceded their leadership as far as NFC goes and will either have to play catch up in some awkward also-ran fashion or just try to stop NFC altogether. In either case, it’s not too enviable of a position to be in. Needless to say, there are several real alternatives for iOS devotees who really want to use NFC, like Device Fidelity or Flomio.

Lack of Acceptance

Mobile payments are still lagging.

While the payment community is feverishly figuring out how to make all the pieces come together, turf wars continue to play out.  And notwithstanding all of PayPal’s and Square’s prognosticating about the failure of NFC, the genie is out of the bottle and no wishful thinking will put it back in.  Everybody — and I mean EVERYBODY — wants a mobile wallet, though few actually seem to know how or why.  This will continue throughout 2013 and we will start to see some players emerge as real leaders sometime in early 2014 after more of the trials and jockeying settle some.

Lack of Awareness

Everyday consumers and marketers need to be educated on the convenience of the technology.

While everyone in the industry, perhaps rightfully, has been spending all of their energies in securing their place at the table, they seem to have forgotten one critical component to the equation:  the consumer.  While we — as NFC practitioners — all love and think NFC is truly a transformational technology, we’ve  not spent a lot of time proving the value of it to consumers, or for that matter, people who sell to consumers.  Until the world, or at least a good part of it, starts thinking that NFC stands for Near Field Communication and not the National Football Conference or even worse, “No Freakin’ Clue,” then we will stand in perilous danger of the technology just languishing on devices. In order to facilitate the adoption of NFC, trusted brands must make it an initiative to educate consumers. Sadly, as of lately, most people do not even know how to turn NFC on in their phones. Point made.

Lack of Penetration

Currently, there are just too many technical idiosyncrasies to facilitate widespread NFC adoption.

“It’s gotta be seamless.”  Tremendous strides have been made, especially through the efforts of the NFC Forum, when it comes to standards.  But there still are many technical challenges that need to be worked out, beyond just knowing that you need to turn NFC on.  Whose wallet do I use? Who is top of wallet? How do I launch applications? These are just a few of the prevalent quandaries that need to be sorted out and made readily accessible for users to figure out, let alone, navigate. This does not even include the simplistic things like tapping an NFC tag in a place that offers free Wi-Fi: Wi-Fi is enabled, and you have to accept the terms of the Wi-Fi service provider before you are redirected to the web-based content. If you don’t know that, then you just keep waiting until you just give up and say, “Oh this just doesn’t work.” This alone has the potential to transpire into the death knell of any technology.  So the industry must get ahead of it to ensure a credible customer experience.

Lack of Evidence

In order to demonstrate its real world application, the industry needs more real use cases.

So at the end of the day, I have to WANT to use something in order for me to … well, use it.  It has to be easy and it has to make my life easier in some way.  Payments make a lot of sense, but lack of infrastructure, security concerns, and  old habits will all start to change, but will not completely change this year.  Those issues will be left to 2014 and beyond.  But some of the non-secure, non-payment applications that make life easier like combining all of my loyalty cards on my phone, or getting offers and coupons to my phone when I need and want them, all seem to be pretty cool and more than that, make my life easier.  2013 needs to — and WILL — see a lot more applications and use cases for the world to see on the non-payment side of NFC.

Our industry has its challenges, yet I am excited and optimistic about the direction this technology will take us.  No, I do not believe that 2013 will be THE YEAR that NFC becomes a household technology; but I am certain that we as NFC professionals and practitioners will make great strides in education, solutions development and implementation and that 2014 will be a VERY GOOD YEAR for the industry.

This article is the first of a two-part series.  Visit www.nfcbootcamp.com next week to learn why 2013 will BE a better year for NFC.


About the Author:

Rob SabellaRobert P. Sabella is founder and CEO of OTA Training, LLC. OTA is a global leader in RFID and NFC training and certification. OTA Training is the creator and producer of the NFC Bootcamp™ series, the first globally standardized NFC training program. Robert brings more than 20 years of entrepreneurial experience to OTA and is considered one of the most innovative leaders in developing and bringing new technologies to market.

 

 

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