Masabists: NFC Roundup 2009

// October 25th, 2009 // Mobile

This post was originally featured on the Masabists blog.

After many trials, NFC has been on the cusp of launching in Europe for some time now. It is regularly brought up in conjunction with mobile ticketing, which has been one of the key use cases always quoted for the Felica NFC system available in Japan for some years now.

The potential is huge, and at Masabi we greatly look forward to the day we can start using it for transport ticketing – but where do we stand, in late October 2009?

UK Operator Support

O2 last did an NFC trial in 2008, and almost exactly a year ago they stated at a Mobile Monday NFC event that it had gone so well they were looking to run another trial at some point in the future. We haven’t had that trial yet.

A mobile phone feature requires operator subsidy to gain traction, because no manufacturer will foot the bill for the electronics on their own. Therefore, the number of NFC-enabled handsets currently available from each UK operator tells us a lot about where NFC lies along the feature adoption curve:

  • O2 – 0
  • Vodafone – 0
  • Orange – 0
  • T-Mobile – 0
  • Three – 0

Carphone Warehouse, the UK’s biggest indepedent high street retailer, also currently sell no NFC-enabled handsets.

NFC-Capable Handsets

GSM handsets with NFC launched by handset manufacturers:

NFC Predictions

Which year will NFC take off?

How big will the market be?

  • “by 2012, some 292 million handsets — just over 20 percent of the global mobile handset market — will ship with built in NFC” (ABI Research, Apr 2007)
  • Mobile phone based contactless payments will facilitate over $36 billion of worldwide consumer spending by 2011.” (Strategy Analytics, Oct 2006)

It’s easy to be cynical about 20% of handsets having NFC in 2012, as we start to roll into 2010 without any NFC handsets on sale – but once NFC handsets start shipping, how quickly could they be adopted?

Phone Feature Adoption Curve

In 2000 Sharp launched the world’s first camera phone, which was a bit of a novelty. By the end of 2003, 25-35% of handsets had some sort of camera on them. By 2007, M:Metrics stated that 75% of UK handsets and 51% of US handsets had cameras – 7 years after the first launch.

Arguably, cameras are a more obvious feature for a mobile handset than NFC.

The first handset commercially available outside Japan with integrated NFC was the Nokia 6131NFC, launched in 2007. At the end of 2009 we still have no operator subsidised NFC handsets, which suggests there is little chance of matching the camera adoption rate, with 25-35% at the end of next year.

From this quick comparison, we can assume that we are either still sitting before the start of the NFC adoption curve, or the NFC adoption curve is very much flatter than that of phone cameras – more like mobile TV, say.

Conclusion

When it comes, NFC has some great potential in niche markets like mobile ticketing. At Masabi, we’re greatly looking forward to it. But right now, as a company principally interested in mass-market technology, we’re not holding our breaths.

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