The Near Field Communication (NFC)
The Near Field Communication (NFC)market has moved
from an ‘innovator’ to an ‘early adopter’ phase, and from trial development to
the first commercial roll out. The key driver for the market is the wide
adoption of the NFC solution in mobile phones, as without massive numbers of
NFC-enabled mobile phones in use, the market will not be able to realize its
immense potential.
The analysis notes that in 2015, NFC will clearly
be the most-used solution for mobile payment. Frost & Sullivan expects that
the total payment value for NFC globally to reach €111.19bn in 2015, while the
NFC payment value in the EU is expected to reach €41.87bn. Frost & Sullivan
forecasts a five-year compound annual growth rate (CAGR) of 118 per cent
between 2010 and 2015.
“There are two possible business models for the NFC
market; the first one is based on a memory rental model, where the NFC
application will rent the memory space used by its application, and the second
is a pure rental model coupled with extra cost-per-use, where the application
will pay a cost-per-year with a given number of actions,” explains Frost &
Sullivan global program director Jean-Noël Georges. “When this number of
actions on the application such as update, patch, read and write is reached,
extra costs are charged to the application provider.” Frost & Sullivan
anticipates that the pure rental model will probably be the most widely used.
The analysis notes that, for almost a decade, the
NFC solution has been facing political and commercial problems. Most industries
involved in NFC trials did not want to share the substantial revenues generated
by the solution. Illustrating this point was the commercial discussion between
banks and network operators, neither of whom wanted to share revenues. At the
beginning, each wanted to force the other to adopt their business model. At the
end, they were forced to admit that cooperation was the best compromise.
The NFC market also has the potential to create
revenues for the entire NFC ecosystem, the analyst says. Handset manufacturers,
trusted service management system providers and marketing and commercial NFC
service providers all stand to benefit.
“Many marketing companies are already involved in
the NFC ecosystem,” “This is a good signal because, in the past,
marketing companies were involved in new technology roll-outs only when the
transition occurred from purely trials to first commercial deployments.”
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