NFC Is Not Dead!!!

Many have branded Apple’s iOS7 the harbinger of death for Near Field Communications (NFC).  Although iOS7’s Airdrop feature is a really intriguing peer-to-peer communications application, it does not rule out the use of NFC in an upcoming iPhone nor does it suggest that NFC is dead.   Why?  Because peer-to-peer is only one of three communication modes supported by NFC.

The three communication modes of NFC are as follows:

  1. Peer-to-Peer: The secure transmission of data from one NFC-enabled handset to another in accordance with a logical link control protocol.  This mode is most commonly used for transmitting contact records, photo’s, calendar items, etc.
  2. Secure Card Emulation:  The transmission of encrypted information to a contactless reader device in accordance with the smartcard protocol.  This mode is most commonly used for transmitting credit card information.
  3. Read-Write: The exchange of information between two NFC-enabled elements/devices in accordance with the NFC Data Exchange Format protocol.  This mode is most commonly used for reading information from or writing information to an NFC tag.  This mode is typically used in smart poster applications whereby a NFC-enabled phone can read a tag in a poster.

While iOS7 has led some to believe that NFC is dead, the perceived inability of some NFC-enabled wallet/payment platforms, such as Google Wallet and Isis, to achieve rapid consumer adoption has prompted others to predict NFC’s demise.  It should be remembered that NFC’s fortunes are not based upon any single application or use case.

It surprises me but virtually no one is discussing the opportunities represented by the Read/Write mode of NFC, although it is gaining significant commercial momentum.  The industry leaders in Out Of Home (OOH) advertising, such as Clear Channel, JC Decaux  and Adspace, are aggressively deploying NFC-enabled signage.

Why are these OOH guys moving to adopt NFC if it’s dead?  It’s because the NFC-enabled use case is much easier to understand.  It is far easier to tap on an object to get information than it is to scan a QR Code or key a text message.  NFC is just a much friendlier consumer engagement technology.

While it would be great to have Apple adopt NFC, let’s not forget that they represent only one third of all smartphones sold.  Every major smartphone maker is now shipping NFC phones.  Samsung, LG, Nokia, RIM, HTC, Motorola, Sony are all shipping NFC-enabled smartphones.  All major operating systems are supporting NFC, which includes Android, Windows Phone 8 and RIM.  Let’s not forget too that Apple’s market share of late has been shrinking.

Let’s face it, NFC is coming and it is here to stay. Shipments of NFC-enabled handsets grew by 300 percent to 140 million units in 2012.  According to Berg Insight, NFC-enabled smartphone shipments will deliver a 48.2 percent compounded annual growth rate through 2017.  Over 1 billion NFC-enabled handsets will ship in 2017 and well over 2 billion will be in active use by 2017.  The future of customer engagement is NFC and it’s only a “tap” away.

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