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Four Hurdles to Wider NFC Adoption

In a release about Near Field Communication, or NFC, ABI Research of Oyster Bay, New York, has cited what it considers four leading impediments to faster adoption. NFC is an up-and-coming contactless technology by which electronic devices -- paricularly cell phones -- communicate with each other over a short range.
Apr 04, 2006This article was originally published by RFID Update.

April 4, 2006—ABI Research of Oyster Bay, New York, has issued a release about Near Field Communication, or NFC, an up-and-coming technology protocol by which electronic devices -- particularly cell phones -- communicate with each other over a short range. It is expected to enable conveniences such as waving a cell phone in front of a movie poster to purchase tickets. Built on high frequency RFID, NFC has received the backing of giants like Nokia, Samsung, Microsoft, Visa, and Mastercard. For more on the technology, see the NFC Forum website.

ABI has cited what it considers four leading impediments to faster adoption of NFC. The first is the low number of cell phone models that are actually NFC-enabled. While NFC will exist across a wide spectrum of devices, its primary vehicle will be the consumer cell phone, so until more cell phones offer NFC, the technology will be unable to gain meaningful traction. Related to that is the lacking number of mobile operators that are conducting NFC trials. Such trials are "vital", according to ABI, but they aren't economically justifiable until more phones are equipped with NFC.

The third impediment is the lack of an NFC application programming interface (API), which can be understood as a standard by which software developers design applications that run on any NFC phone. Without a standard API, NFC application developers must invest time and resources customizing their software to the idiosyncrasies of different NFC devices. (An analogy from the EPC world would be reader vendors having to develop different reading functionality for each brand of tag, which would be costly and unscalable. With Gen2, a reader manufacturer simply complies with the standard, and it can rest assured that its readers will work with all compliant tags, existing and future.) Erik Michielsen, ABI Research's director of RFID and M2M research, sees progress on development of an API, saying "there is now a widespread acknowledgement of its importance."

Lastly, ABI Research believes NFC will really start gaining momentum when the benefits from contactless payment initiatives of the last year are collected and quantified. These benefits will strengthen the argument for NFC, which enables contactless payments at locations beyond just the point-of-sale. With contactless payment benefits proven and its acceptance by the mainstream complete by 2007, NFC will be welcomed by both stakeholders and consumers alike. After that, ABI predicts the same adoption path for NFC that contactless is following: two years of small pilots, one year of scalable pilots, then full-blown deployments.

Despite these impediments, ABI Research is generally optimistic about near-term progress for NFC. In November, the firm predicted major progress through 2007. See our article, ABI Research: Big NFC Progress by 2007.

Read the release from ABI Research
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