Is NFC the Next Mobile Experience?

This week, the first Mobile Monday Silicon Valley of this year was held in San Francisco at the Hyatt-Regency. The theme of the event, Near Field Communications (NFC) -The Next Mobile Experience? featured a panel discussion on the future of NFC here in the US. 300-plus people attended the night expecting to hear about the future direction of NFC but many left with many questions yet to be answered. A big player in the smartphone market was missing from the panel – Apple, who is reported to pass on NFC on the upcoming iPhone5.

The event started with a quick presentation by Jeff Miles from NXP on their outlook for NFC. Miles’ identified three application areas for NFC applications:

(1)  People Interaction

(2)  P2P Communications and

(3)  Card Emulation – Payment

• David Weiden, general partner of Khosla Ventures, moderated the panel, and the panel members were as follows:
• Jeff Miles, Panelist, Director Mobile Transactions Worldwide, NXP
• Javed Chaudry, Panelist, Director, Mobile Commerce at Motorola Mobility, Inc.
• Mohammad Khan, Panelist, President and Founder, Vivotech
• Rob Canterbury, Panelist, Senior Director – Business Development, Qualcomm
• Rob Von Behren, Panelist, Technical Lead, Google

What is NFC?

RVB: “[It] provides a way to interact with the real world”

MK: “What does the one touch [of NFC] do?…it can answer the questions – Who you are? How you do things? What you do?”

What’s out there for NFC?

MK: “NFC has been tested in many apps…60-70M phones will ship with NFC in them this year…about 6% of total mobile shipments this year.

JM: “About 15% of Tier 1 Retailers (McDonald’s, Best Buy, Starbucks, etc.) have established the infrastructure to establish NFC.”

JC: “Regional growth will be in North America and Western Europe. In the next three years, 20-25% of Smartphone will be NFC enabled.”

What are the killer Apps for NFC?

JM: Transportation and Payment will have the biggest apps. With a lot of activity around payment…Interaction will be another area of activity.”

MK: “Because of the war between Smartphone vendors, UX are starting to be the same so vendors will want better UX and NFC can give that to them.”

RC: “Next apps will allow people to live better life…more interaction with the consumer with my phone.”

RVB: “Ways of interaction, for example-manual vs. keyless entry for cars…today we can’t imagine a car without it…They (Apps) need to take advantage of interaction in the real world.”

What Do You Need to Enable / Adopt NFC?

JC: “The challenge is not technology, it’s enabling the business ecosystem.”

RC: “You can’t ignore NFC…If someone doesn’t pay attention someone will take it away…similar to the Blockbuster/Netflix story…Business models need to be solid, infrastructure…Mobile OS is pushing the agenda…carriers is the key as well…the business model has to make sense.”

MK: “Apps like Shopkick may help enable NFC, need developers to create great applications, and enterprise companies help the business infrastructure.”

The key takeaway from the event is that NFC is being adopted slowly due to the business ecosystem issues. Japan has adopted their own version of NFC (FeliCa Network) for many years but their business ecosystem is much different than that of the US. And still, their adoption has been slow on payment. NFC provide ways of check-ins when GPS is not available. Mixi, a social network giant in Japan, announced “checkins” using NFC in areas (i.e. underground) which cannot be served by GPS. QR codes will still continue to complete with NFC for check-ins and the question is Will NFC compete with established technologies like GPS and QR codes or be synergistic? Our consumer experience with these technologies will determine that.