Apple's NFC Snub on iPhone 5 a 'Significant Blow' to Mobile Payments Industry

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Apple's decision to leave an NFC (near-field communications) chipset out of the iPhone 5 reduced confidence in the technology, causing Juniper Research to lower its global NFC market forecast.

The new Juniper report shows that by 2017, the proportion of NFC-enabled smartphones will fall only marginally below previous estimates, but global NFC retail transaction values are now predicted to reach just $110 billion. Previously, the group forecast $180 billion.  

Lower NFC visibility among consumers and fewer opportunities to make payments – caused in part by Apple's omission of the technology – threaten a cycle of “NFC indifference" in the short term, Juniper said.

“While many vendors have introduced NFC-enabled smartphones, Apple’s decision is a significant blow for the technology, particularly given its previous successes in educating the wider public about new mobile services," said report author Dr Windsor Holden. “Without their support, it will be even more difficult to persuade consumers – and retailers – to embrace what amounts to a wholly new means of [mobile] payment."

Retail transactions in Japan and Korea will likely experience little or no impact from the decision.

Despite Apple’s decision, NFC trial consumer feedback has been extremely positive, suggesting strong latent interest to use the technology for mobile payments when services are more widely deployed.

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