Why app developers should be thinking about NFC now

It’s no secret that near field communication has failed to catch on the way many pundits and analysts had predicted. Once hailed as a technology that would transform the mobile industry almost overnight, NFC has been shackled by a lack of support from manufacturers such as Apple and by consumer disinterest in the mobile payments it was supposed to power. Which is why analyst houses like Juniper Research and Gartner have been forced to scale back their rosy forecasts for NFC-related activity.

But some new figures from Evans Data show that mobile developers are beginning to try to figure out how NFC can help them build more compelling apps. Nearly one-third of the 500 developers who responded to a recent Evans survey of developers said they were already supporting NFC to some extent, and an additional 45 percent said they plan to support the technology within the next 12 months. Meanwhile, Berg Insight reported last month that sales of NFC-enabled smartphones tripled in 2012 over the previous year to reach 140 million units; Berg predicts that annual sales will reach a billion units by 2017. So it’s clear that a solid foundation is being laid for developers who can leverage it to make their apps better.

If it’s ‘Not For Commerce,’ then what’s it for?

NFC-based payment systems like Google Wallet and Isis have struggled mightily, but there are some other obvious uses where the technology could shine. A large user base and high transaction volume make mass transit perhaps the most ideal segment for NFC, as one survey from Deloitte illustrated. (Establishing a mobile ticketing program for Japan’s huge train system gave the overall mobile payment space a huge lift in that market, as I’ve written before.) As my former colleague Ryan Kim wrote almost two years ago, NFC also is likely to play a huge role in mobile marketing campaigns and loyalty programs – you know, the kinds of things that have enticed consumers to use Starbucks’ mobile payments program. It will be used in a variety of security scenarios, from unlocking doors to identifying users via chips in smartphones, keycards or even jewelry.  And of course it can power the kind of peer-to-peer content transfers that Samsung has made a selling point for its Galaxy smartphones.

And those are only the most obvious examples of how NFC will be used. This case study published by Intel outlines an app that leverages NFC to help healthcare providers identify patients in the waiting room and call up their medical records with just a few clicks. Samsung recently launched a line of NFC-enabled printers that can print photos, documents and web content with just a click from a smartphone. And a high-end French vintner is combating fraud by attaching NFC tags to its bottles, which sell for thousands of dollars.

A game-changing technology – in the long term

None of this is to say that NFC usage is anywhere near a tipping point. Even in mature Western markets, NFC-enabled handsets are still just a fraction of the overall number of mobile phones in use. Apple will continue to handcuff the market if it once again opts not to include NFC in the next iPhone. And no single app (or payment system) has generated the kind of traction that could drive rapid, mass-market uptake of NFC-based activities. But just as Bluetooth has become a commonplace technology that many of us use without thinking about it, NFC is a powerful tool that can add tremendous functionality to mobile phones and tablets. If you’re a developer of apps for those gadgets, you should be thinking hard about how you can capitalize on those opportunities.

Relevant Analyst
Colin Gibbs

Colin Gibbs

Founder and Principal Peak Mobile Insights

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