NFC in 2013

NFC had a good run in 2013. Every month, we heard exciting news about NFC products or trials being launched. These launches have extended far beyond the “mobile payment” category to include product/service marketing, toys, games, furniture, printing, utilities, machine-to-machine (M2M) communication, quality control, inventory management, service automation, and more.

ABI research pointed out that smartphones will continue to account for the majority of NFC shipments in 2013 as volumes jump by 129%. However, from 2014 onwards, computing products, peripherals and automotive will have greater adoption of NFC, and consequently, smartphones will decline from a peak of 80% of all NFC device shipments in 2013 to less than 60% in 2017.

NFC and other connectivity enablers are greatly expanding an “Internet of Things (IoT)”. It’s obvious that we are becoming increasingly connected through wireless technology, and M2M communication is on its rise. A good example is that Google and Apple are about to expand their battle to a new front: the automobile. This was reported by the WSJ a couple of days ago.

Big data is a buzz word nowadays. NFC, RFID, QR Code, and Bluetooth Low Energy (BLE) are all types of sensors that contribute to the big data scenario. Big data analytics are going to produce valuable information about consumers and merchandise. It’s also going to change the retail store shopping and mobile phone experience.

One of the usages of NFC is mobile payment. Recently, AT&T, Verizon and T-Mobile launched ISIS – NFC mobile payment using a SIM-based secure element that manages payment credentials. It will take a while before the consumer market adopts this technology since NFC is not yet a familiar technology, and mobile payment is not a yet a common practice.

In addition, a different approach to implement mobile wallet emerged. Google Wallet led the way to adopt the Host Card Emulation (HCE) approach in order to implement NFC secure app independently from telecom’s control of SIMs. Tim Horton’s, a North American coffee chain, has also launched an NFC mobile payment service using HCE at 3,500 locations in Canada and 800 in the United States. It will be interesting to watch the battle between various NFC mobile payment implementations and adoptions.

2014 should be an exciting year as NFC products and services continue to grow in availability and usage.

What iBeacon Deployment Says About NFC

On December 5th, Apple deployed iBeacons (Bluetooth-powered stations) in 254 stores nationwide, creating a new shopping experience for its customers. When customers walk into Apple stores, their location can be detected by iBeacons which send location specific messages to iPhones or iPads.

To receive this service, customers need to have iOS7 on their devices and an app from the Apple Store with tracking permissions. Customers also need to have Bluetooth turned on since iBeacon transmitters use Bluetooth 4.0.

Bluetooth is a wireless connectivity technology that was invented in 1994. It consumes a lot of energy and drains cell phone batteries fast. Blue Low Energy (BLE) was introduced in 2006 and was merged into the Bluetooth core specification 4.0 in 2010. It consumes much less energy than the conventional Bluetooth. Apple deployed the technology recently with the new release of iOS7.

iOS7 enables iBeacon to communicate with iPhone and iPad through BLE. The successful deployment of iBeacon within 3 months of the iOS7 release demonstrates that vision can be realized when a plan is well thought out and executed. At the same time, iOS7 does seem to have a lot of problems and improvements need to be made.

In September 18th when Apple released iPhone 5S and 5C with BLE, the NFC ecosystem was anxious about the development since the large market share of Apple devices heavily impact technology adoption. The NFC ecosystem was hoping that Apple would adopt NFC and help to move the technology forward at a faster pace. Now, there are questions about whether NFC will ever be fully adopted since the iBeacon BLE technology was Apple’s choice.

Personally, I think BLE is a complimentary technology to NFC. The two do not have a mutually exclusive relationship. NFC is short range (4cm) wireless connectivity technology, and it can’t be tracked unless a tap happens. It works in different modes; active to active and active to passive. BLE can be tracked whenever you turn the Bluetooth on. It operates within 32 feet and it works in active to active mode. Both technologies can facilitate a more integrated consumer experience.  For more details, please reference my book “Everyday NFC: Near Field Communication Explained”.