Near Field Communication (NFC) Forecasts Revised Downward, But Long Term Prospects Still Bright

The worldwide market for contactless technology in transportation ticketing and contactless payments grew more than 15 percent in 2007, as the technology made greater inroads into consumers’ lives around the world. The market now stands at a value of more than $200 million but will reach more than $820 million by 2013, according to the latest market analysis from ABI Research.

Positive growth in contactless card rollouts took place during the last half of 2007, while the uptake of contactless capabilities in mobile handsets – dubbed NFC (Near Field Communication) – continued to be stymied by difficulties in bringing the technology to the consumer market. Accordingly, 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.

ABI Research now believes there will be longer than anticipated delays to NFC deployments and has again adjusted its latest quarter and next annual figures accordingly: the previous forecasts for total NFC device shipments stood at 1.1 million for 2007, and 9.81 million for 2008. The revised forecast stands at 0.65 million and 6.52 million respectively. However, says Collins, “Given the strength and interest among carriers around the world for NFC, our long-term forecasts remain unchanged.” 

NFC rollout will be supported by the widespread adoption of contactless transportation and payment systems. Last year, saw contactless transportation making greater inroads into public transport systems around the world, with some notable switches to contactless single use ticketing too.

However, the bulk of the growth of contactless demand over the next five years will stem from the uptake of contactless payments from cards and mobile handsets. Europe took its first real steps toward contactless payment adoption in 2007. The initial UK contactless rollout in London that began in the second half of the year will prove a bellwether for the technology in Europe, especially given the scale of the initial rollout and the integration of contactless with the established EMV smartcard payment system.

ABI Research’s “Contactless Commerce Forecasts” provide extensive data on contactless revenues, segmented by application, merchant, and issuer. The database provides information on transponder IC shipments, broken down by frequency and by region. Other breakdowns include operating frequency, application and form factor, and software revenue, sorted by region and by application.

It forms part of the firm’s Mobile and Contactless Commerce Research Service.

ABI Research is a leading market research firm focused on the impact of emerging technologies on global consumer and business markets. Utilizing a unique blend of market intelligence, primary research, and expert assessment from its worldwide team of industry analysts, ABI Research assists hundreds of clients each year with their strategic growth initiatives. For information, visit www.abiresearch.com, or call +1.516.624.2500.