Mobile NFC Growth Forecast Scaled Back to $110bn in Transactions by 2017 as iPhone 5 Omits Chipset

Hampshire, UK-based Juniper Research has published its revised forecasts for the global NFC market, significantly scaling back its growth estimates for the North American and Western European markets.

NFC Retail Transaction Values Reduced

While the report finds that by 2017 the proportion of NFC-enabled smartphones will be only marginally below previous estimates, global NFC retail transaction values are now expected to reach $110bn in 2017, significantly below the $180bn previously forecast.

According to the report, Apple’s decision to omit an NFC chipset from the iPhone 5 has reduced retailer and brand confidence in the technology, leading to reduced POS (Point of Sale) rollouts and fewer NFC campaigns. This in turn will lead to lower NFC visibility amongst consumers and fewer opportunities to make payments, threatening a cycle of NFC indifference in the short term.

A Two Year Lag for North America & Western Europe

“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,” says report author Dr. Windsor Holden. “Without their support, it will be even more difficult to persuade consumers and retailers to embrace what amounts to a wholly new means of payment.”

The report found that Apple’s move would impact most dramatically on markets in North America and Western Europe, where transaction values would exhibit a two year lag on previous forecasts as retailers delay POS investments.

South Korea & Japan Unaffected

Conversely, retail transactions in NFC’s heartland in Japan and Korea are likely to experience little or no impact from the decision. It also observed that lower than expected adoption of Google Wallet allied to a delayed launch of the ISIS NFC project in the US would also have a negative effect on that market.

Other key findings from the report include:

• Despite Apple’s decision, NFC trial consumer feedback e.g. at the London Olympic venues and in Singapore – has been extremely positive, suggesting strong latent interest when services are more widely deployed.

• Both MasterCard and Visa have certified several NFC service solutions and datacentres, including those of Giesecke & Devrient and Gemalto

The NFC Mobile Payments ~ No Contact Needed whitepaper is available to download from the Juniper website together with further details of the full report and the attendant forecast dataset:

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