What is NFC and why is it ‘the future’ for mobile users like you ?

Smartphones are awesome. They help people lead their lives and, at Whatphone, we love them for it. There used to be a day when all your phone did was make calls. Then came calendars, contacts synching, music, video, games and now, whatever you’re doing and whatever you like, there’s an app to help you with it. But is there more to come in terms of what you can expect from your Smartphone ?

Technology works commercially when it fills a need, when it helps users, like you and me, solve a problem ( and, some would say, then that solution capability can be marketed successfully and profitably ). Samsung sell more Galaxy SIIIs not just because they’re shiny, beautiful and desired but because the device itself helps users conduct their lives ‘better’ ( in whatever terms matter to them ).

The NFC Trend

One of the strongest trend developments we’re seeing at Whatphone is the rise of NFC or Near Field Communications. NFC is just a set of agreed rules the phone manufacturers put in place so Smartphones can ‘talk’ to other machines – including other Smartphones – when they’re near each other. NFC as a concept has been around a long time. A governance body was established in 2004 to agree standards for the technology at the time and it’s still around now. There’s even a forum which has been set up to promote the NFC capability worldwide.

What are some examples of NFC ?

A good example at the more basic end of the market, to introduce the idea, is the ‘Bump’ Android application. Two smartphone holders can transfer photographs they’ve taken and contact details of, say a business acquaintance, over the internet. The sender decides what he / she want to transact, they both confirm and, from the point of view of the people involved, the content is transacted seamlessly. It’s one of the top 10 most downloaded applications ever !

Other examples, to help you expand your thinking include allowing you to tap your phone on a telecommunication provider’s poster advertisement ( say, a Vodafone advert for improved network ) to allow you to see the network map, with new coverage areas identified in your region. Or to tap a door and open it – with your Smartphone acting as the key. Or monitor your heart rate and dial 000 if you have a heart attack. When you start to think about it, the possibilities are almost endless !

Where’s the money ?

Of course, all this gets a lot more interesting when you include financial transactions as part of the picture. Whoever solves the problem for users of carrying a wallet and a phone around ( by providing the wallet capability within the phone in a secure way  ) is going to make a packet. Whoever facilitates the transaction can ‘clip the ticket’ of the purchaser / vendor and take a tiny percentage of the payment for enabling it. All of those tiny percentages add up to a new revenue line !

Right now, putting the NFC capabilities in to the SIM rather than the phone is something the telcos ( telecommunications companies like Optus, Telstra, Virgin and Vodafone ) are looking in to. If they can hold on to the ‘key’ of making mobile payments work – and, for example, add your parking ticket to your mobile bill, they can generate a new revenue stream and, metaphorically as well as literally, take a ‘share of wallet. ‘

Of course, the device manufacturers want the same thing – ownership of the ticket clipper. And so does PayPal. So it’s all go in the market, trying to ‘landgrab’ and build their ‘wallet app’. Others will no doubt follow – it’s the inextricable rise of the power of the Smartphone !

By 2015, predictions say that 50% of Smartphones will have NFC.

In the meantime, buy your Smartphone secure in the knowledge that Whatphone is keeping tabs on this significant trend and will keep you informed on what it means to you !

Neil Aitken

Having worked in 3 countries for 4 telcos on both voice and data products, Neil is in a position to give you the inside track. Get beyond the marketing messages to the best plan for you.