Juniper Research: iPhone 5’s Lack of NFC Has Set the Market Back by 2 Years in US&W. Europe

Apple-iPhone5-NFC-market-rfid-blogBefore the iPhone 5 emerged from the shadow, there was plenty of speculation about whether Apple would include NFC in the device. Yet the outcome turned out to be disappointing. Analyst Juniper Research says that Apple’s decision to keep away from NFC has set the NFC market back by 2 years in the U.S. and Western Europe.

Except for Apple, world’s leading mobile makers have all added the tech to their handsets, including HTC, Nokia and Samsung all jumping aboard. Even RIM has brought out some NFC-enabled BlackBerrys. Thus Apple’s absence from NFC becomes conspicuous.

In response to this, Apple’s Phil Schiller said the company sees Passbook as a better alternative, arguing that this iOS 6 feature, which allows users to store tickets and loyalty cards on their device, meets most customers’ needs and works with retailers’ existing payment infrastructure — without requiring them to invest in new point-of-sale devices.

However, due to Apple’s evasion from NFC field, Juniper has significantly scaled back its growth estimates for North American and Western Europe. The analyst argues that Apple’s decision has reduced retailer and brand confidence in the technology, which in turn has led to fewer NFC point-of-sale rollouts and campaigns — this means fewer consumers are likely to encounter the technology. It says there is a risk of a cycle of “NFC indifference” in the short term.

In its new research report, Juniper analyst Dr. Windsor Holden writes: “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.”

Juniper’s report predicts that while the proportion of NFC-enabled smartphones will be “only marginally below previous estimates” by 2017, global NFC retail transaction values are expected to reach $110 billion in 2017 — significantly below the $180 billion the analyst had previously forecast.

“Without [Apple’s] support, it will be even more difficult to persuade consumers – and retailers – to embrace what amounts to a wholly new means of payment,” Holden adds.

The analyst talks about a “two-year lag” for NFC transaction values in North America and Western Europe compared to previous forecasts, as retailers delay point-of-sale investments.

North America and Western Europe are the regions it expects to be most dramatically affected by Apple’s decision — other regions, such as South Korea and Japan, will be largely unaffected, with the analyst expecting “little or no impact” from Apple’s decision.