What Happens When iPhone NFC Opens Up ?

Last year the Apple iPhone 6 joined the majority of smartphones by containing an NFC controller. However, at the moment, this new iPhone is locked down only to the Apple Pay mobile payment system. This means that iPhone 6 users are unable to take advantage of the massive potential of NFC through apps, tags and communication.

Despite this, in the 72 hours following it's launch, a million credit cards had been registered with Apple Pay - an indication of the popularity from Apple's user base. Ever since Apple included the NFC chip, the question has been when will Apple will open up access to the NFC controller. From there, what difference it would make to the market. In answer to the first part - we simply don't know. At the time of writing early in 2015, NFC.Today currently hold the view that it's not likely to happen anytime soon. In fact, we aren't sure if it will ever happen at all.

As for what difference it would make, let's consider what will happen if the iPhone's NFC controller is opened up and allowed to function with NFC tags and applications.

iPhone 6 NFC Marketing

Marketing is arguably one of the most anticipated uses for the iPhone's NFC function. Clearly, advertisers are currently holding back because without the iPhone, a percentage of all NFC marketing spend is going to be lost. A complete round-up of all phones changes that.

Additionally, while there are of course more Android users than iPhone users, iPhone owners are seen as spending more money than their Android counterparts, making them a valuable demographic.

As such, NFC marketing, such as smart posters or other promotional material, will become more attractive to retailers and advertising agencies once the iPhone can interact with NFC tags. This will affect Android and Windows Phone users as well as iPhone users due to Apple's influence. An example of this knock-on effect can be seen in America, where the release of Apple Pay helped grow the general mobile payments market. This launch saw boosts in the use of Android mobile wallet apps such as Google Wallet and Softcard which grew as more retailers struck deals with the companies.

iPhone 6 NFC Apps

Applications would benefit from NFC as current apps could be updated and new Apps could be developed and released to use this new functionality. NFC could be used in a number of ways in new applications. Apps could be released that write or read the tags or encode the tags with weblinks or trigger system setting changes. Another potential application could allow communication between devices, like Android Beam, that can send information easily from one device to another. Developing this theme of communication, applications could be used to connect and pass information from phones to other smart devices around the home – developing the Internet of Things.

NFC functionality could be incorporated into existing apps from retailers and other companies. This is one of the most interesting uses as it will allow stores to easily and intuitively interact with their customers. For example, NFC tags could be linked to further information on products or retailer's apps could allow extra functionality such as saving items for later. This concept is already being pioneered by Topshop using barcodes to save items for review, however using NFC tags would allow for a better experience, increasing ease of use for the users and so greater rewards for the retailer. Based on the range of apps that can tap into this NFC functionality, it is likely that, when the iPhone's NFC is unlocked, the next 'killer app' will use this feature.

iPhone NFC Asset Management

The rapidly increasing use of NFC within Asset Management and similar user and object tracking and management systems has been once of the success stories of NFC. In fact, it's likely that outside payments and ticketing, the use of NFC tags within these areas are going to be the significant growth areas (ie, not marketing).

While we expect to see some 'glow' from iPhone NFC, it's unlikely to change the current momentum in this area as the hardware (the phones) are usually supplied or can be recommended. The cost and relative software and ecosystem restrictions of the Apple iPhone aren't as appealing to many developers in this area and we would expect to see Android continue to dominate in this area. (With possibly Windows Phone creeping in as many corporate clients start to move towards a Windows tech ecosystem).

Conclusion

When Apple does allow the iPhone to work with NFC, we expect there to be a large shift in both companies and consumers perception of NFC, as more marketing and applications become available that use this technology. Due to the popularity and the influence Apple has, we anticipate that NFC awareness will rapidly grow among both everyday consumers, across the platforms, and professionals in marketing and advertising.

Whatever happens, there are certain areas of the NFC market that will change very quickly.