Monday, September 27, 2010

Could Apple Be the One to Unleash the NFC Revolution?

Last month, Near Field Communications World had a quick blurb that Apple had hired an "expert in near field communication technology" as its mobile commerce product manager. Since that announcement, the press world was all aflurry trying to find out who the heck this Benjamin-guy is. While he may not necessarily have a blue-blood technology pedigree in NFC, he may apparently have what the Steve Jobs Reality Distortion Field needs to bring passion and evangelism to this emerging world.

In case you're reading this blog and wondering "what the heck is near field communications," it is, in short, one of the many varieties of "contactless technologies" being explored today. Ever since I first learned of near field communication at CTIA back in 2008, I've been intrigued by NFC technology and the possibilities that it entails. I've written about it from time to time here and here.

Here in these United States, we make payments by sliding a card embedded with a magnetic strip through some type of reader. We've been doing it with our credit cards, debit cards, and transit passes for several decades now. My local laundromat has likewise gotten into the magnetic strip act. Instead of stuffing quarters, I now just slide a plastic card containing a magnetic strip into the slots and pay that way. How convenient!

Near field communications takes the magnetic strip to the next logical step. Instead of physical contact between magnetic strip and reader, one just needs to hold a miniature data storage chip very closely to the reader. An antenna transmits data over a very short range - within just a few centimeters.

Mobile devices are the logical candidates for NFC because they are small, self-powered, ubuiquitous, and highly personal devices. Heck, it wasn't all that long ago when we all scratched our heads asking, "Take a picture with a cell phone? Why?" Since we do just about everything else with our cell phones why not use it to buy things like clothing, groceries, bus passes, and junk food from vending machines?

There are two main reasons why NFC for e-commerce hasn't really taken off here in the U.S. - even after many years of speculation. The first barrier is the cost and effort required to update all point of sale systems to support NFC. Imagine every single ATM, cash register, gas pump, public transit station being upgraded to support contactless payment. Would I be too far fetched if I were to throw out a number of perhaps hundreds of millions of these devices that would need replacing?

The other barrier concerns regulation of the industry to ensure consumer protection. Credit cards carry a $50 limit on consumer responsibility for unauthorized use, and debit cards can carry $500 and even higher in liability, depending upon how quickly consumers report the incident of fraud. So what happens if some one takes your NFC-enabled phone and makes fraudulent charges? What rights do you have as a consumer to be protected from these incidents? ... (silence) ...

So now...back to the original topic of this blog. Patently Apple keeps track of all patents that Apple has filed, and certainly their list of patents relating to NFC are many. Now one thing that I will say that is blasphemous in our day and time: Apple's core competency is not about inventing new technologies. They did not invent the portable media player. They did not invent the notebook computer. They did not invent the mobile phone. They did not invent the touch-screen. Heck! They didn't even invent the graphical user interface that they are so famous for. (They "borrowed" it from Xerox PARC.) Apple's core competency is The User Experience. Apple masterfully builds upon existing technology and provides a superior user experience by extending the experience beyond the device itself. The iPod would not be what it is today without iTunes. The iPhone (and the iPad) would not be what it is today without Apps. And because they focus so much attention upon extending the user experience beyond just the physical device, they have a proven track record of success where others have failed.

So when I see that Apple has some interest in near field communications - however obtuse that interest is at this point - I'm a happy camper. I know that NFC totally makes sense and adds value to our daily experience. I also know that for NFC to be successful, the experience must extend beyond just the NFC-enabled device. And this is exactly what Apple is so good at doing.

Check out some of the things that Apple's looking into with an NFC-enabled iPhone. They could just be the tipping point (once again!) that sets a whole new industry in motion.

No comments:

Post a Comment