Why we may NEVER see NFC in an iPhone

By on September 16, 2012
applepassbook

Why is there no NFC in the latest iPhone? Because that isn’t good for Apple.

With all the hoopla that has been the week in Apple news (did you order your iPhone yet?) one of the biggest conversations has been about the omission of NFC and, for some reason, wireless charging (huh?).

In an interview with AllThingsD, Apple VP Phil Schiller spoke what I think a lot of people are thinking when he said that it wasn’t clear that NFC was the be all and end all for commerce. Apple tends to focus on usability and simplicity and NFC is neither yet – nor is there a clear need for it – so the iPhone went without.

Now this lack of NFC certainly does not mean there is a lack of front facing commerce but, in Apple-style, they have not verbalized it yet. It does center around their Passbook service, it won’t involve NFC and it has the potential to be very very valuable to the company. Here’s my take.

About a year ago Apple was granted a patent for a service called beacon that essentially is a location specific ad targeting system through passive location transmittal. How does this play with Passbook? Good question.

Passbook is the EULA (end user license agreement) that enables Beacon. The basis for Passbook is context via location: your airline ticket doesn’t appear until you arrive at the airport, your concert ticket becomes visible when you arrive at the stadium. How does that happen? How does the software know what to display where? Passive location. Your location is being transmitted and you’ve agreed to this by signing up to the Passbook service.

So now that you’ve agreed to give up your location and it is being transmitted passively, what opportunities does this open up for Apple to monetize your location? For starters, does this rejuvenate (er, resuscitate) the Apple iAds product? It has been a marginal success at best and has disappeared from conversation for all but the very few (and very rich). All of a sudden the combination of Passbook and the permission you’ve given Apple to use your location makes iAds a powerful platform. But that’s only a part of it.

It has often been said that our smartphones have become our most personal devices. Think about what you tell it: It houses all your contacts and the frequency with which you reach out to them (via email, phone, text), it knows your favorite songs, movies, tv shows, and sees all your Facebook posts, tweets, LinkedIn updates because everything comes through your mobile device. It is the termination point for your digital life – and much of your IRL life as well. Apple knows you and knows what you like and hate. All that information – your personal analytics – combined with a constant beacon of location, time and day and your are about to be targeted with stuff you can’t say no to. All through your device. All because of Passbook.

The ability for Apple to reach out and sell to you is what they are interested in doing. There is nothing they do that doesn’t disrupt industry and make piles of cash. This is another of those services. Commerce is not far behind but it will go through iTunes and the 400 million credit cards they have on file and not NFC. NFC doesn’t make sense for Apple – they already have a way for you to pay with a single click. They would rather facilitate the sale and take their cut, that’s what they do with virtual goods and that’s what they will do with all goods, without doing anything other than asking us to sign up for Passbook.

I could be wrong, but Passbook is not about making your life easier, it is about making it easier to sell you products and services that you are most likely to buy and facilitating that transaction. Apple knows how to make money and you can be sure they’ve been thinking this through since the beacon patent was filed in 2010.

About Rob Woodbridge

I'm Rob, the founder of UNTETHER.tv and I've spent 14 years immersed in the mobile and pervasive computing world. During this great time I've helped some of the most innovative companies grow their business through mobile. If you are in need of a mobile business advisor or coach, connect with me here to schedule a 30-minute chat.
  • brianmadden

    I totally agree. The problem with NFC is that it requires millions of retailers to buy NFC readers. And then if they do.. what’s the advantage? Customers are still going to have to open up some app on their phone to authorize the payment… so NFC will require picking up the phone and tapping around a bit. So at that point, why bother adding the NFC hardware to the phone and the reader to the store? Heck Square has this today with their mobile payment app. It uses the internet rather than NFC, but other than that, it’s all the same advantages. NFC is going nowhere. Good for Apple.

  • http://untether.tv Rob Woodbridge

    Brian – couldn’t have said it better. Although MasterCard is slowly doing this with their PayPass offering but that doesn’t require a smartphone and an app. I can’t see smaller retailers or service companies adopting this if there is a cost just to take money they could already take in other forms – like cash. Tough sell and I think that, in all this tech shuffle, the retailers of the world have been forgotten or not asked.

  • http://flash0p.wordpress.com/ flash0p

    NFC isn’t big yet but it will be a big part of our lives in the future. NFC isn’t just mobile payments. I just saw a car commercial that appeared to use NFC to unlock a car and roll up the window without doing anything besides having the keys in hand. I have a friend that has a NFC lock on his door at home now. NFC is used in hotels and companies now for opening doors with ID badges.

    Imagine being able to not carry your keys and wallet with you anymore or an ID badge for work. Yes retailers will have to buy a NFC reader or something for their locations but it speeds the sale process up because the customer would only have to pull out their phone and tap a machine instead of opening wallet, swiping card, and then signing or entering a pin number. Faster check outs means easier transactions for the consumer and business itself.

    Honestly if NFC never did mobile payments and I could just get rid of my keys I carry I would be completely happy. Apple will use NFC in the future I think and I’m bummed they didn’t do it on this launch because it would have sped up the development of getting NFC into useful forms because of apples popularity.

    That’s my 2 cents

  • http://untether.tv Rob Woodbridge

    @Flash0p:disqus You are right that the brunt of the focus for NFC has been only on payments which is a disservice for the technology. I would love to see this type of functionality – even things like posters with NFC embedded in the paper and sensors in pavement – all doable and all coming…eventually!

  • http://www.brianjones.ca joshaidan

    Why do you need NFC to open car doors and start the ignition? Would not Bluetooth work better for that? I’ve seen door locks that open automatically by detecting your phone’s Bluetooth signal.

  • http://untether.tv Rob Woodbridge

    Yeah, we over-complicate things don’t we? Hey, let’s add a chip to every device, offer up a new standard, equip our cars with new chips and roll it out. Piece of cake :)

    I think the real reason is UI and UX. Bluetooth can be a pain, you need to pair the devices while NFC offers a simple “no fail” connection. I also wonder if range is also an issue with bluetooth.

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