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NFC Projections Revised Down (Again)

Persistent hurdles to NFC adoption have caused ABI Research to revise down earlier projections for the market's growth. The research firm had originally pegged the number of shipped NFC devices for 2007 at 1.1 million, and 9.81 million for 2008. The new numbers stand at 0.65 million for 2007 and 6.52 million for 2008.
Jan 17, 2008This article was originally published by RFID Update.

January 17, 2008—Persistent hurdles to NFC adoption have caused ABI Research to revise down earlier projections for the market's growth. The Oyster Bay, New York-based research firm had originally pegged the number of shipped NFC devices at 1.1 million for 2007 and 9.81 million for 2008. The new numbers stand at 0.65 million for 2007 and 6.52 million for 2008, a reduction of 41 percent and 33.5 percent, respectively.

ABI points to "longer-than-anticipated delays" in NFC deployment as the primary reason for the lagging NFC device market, and it notes that the situation is unlikely to change in the immediate term: "NFC handsets did not ship in any volume toward the end of 2007 and the market will remain limited for the first half of 2008."

The good news is that ABI's belief in the long-term potential for NFC is intact. "Given the strength and interest among carriers around the world for NFC, our long-term forecasts remain unchanged," commented ABI analyst Jonathan Collins.

The firm also cites worldwide uptake of contactless technology for payment and transportation ticketing, a market which grew 15 percent last year. That total market is currently worth $200 million, according to ABI, and will grow at a very robust 33 percent over the next five years, reaching $820 million in 2013. This growth will encourage NFC adoption, as the consumer increasingly recognizes the convenience of paying for services using a single, contactless device: his phone.

This is not the first time ABI has revised down its NFC-related projections. Last April, the firm put the number of NFC handsets shipped in 2012 at 292 million, down from the 450 million that had been originally predicted for 2011 (see Research Firm Increasingly Bearish on NFC). That 450 million was itself a down-revision made the previous September.

More than anything, these changing projections are evidence of NFC adoption's ongoing frustrations, chief among which is the complexity of the so-called NFC ecosystem that includes cell phone manufacturers, network operators, transit companies, and payment processors, among others. Sorting out the cost- and fee-sharing among such a diverse group of stakeholders is a tall order indeed, but a necessary one for the NFC market to finally take flight.

Read the announcement from ABI Research
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