Apple's Lack of NFC in iPhone 4S Does Not Negatively Impact the Market

Analyst Blog

Oct. 4, 2011, 2:24 p.m.
John Devlin, Practice Director

All the grand speculation, rumour, and counter-rumour, at the beginning of the year about Apple's grand plan for NFC has been answered - for now.

I am not entirely surprised by the lack of NFC in the iPhone 4S - it is a revision and enhancement of the existing iPhone 4, not an all new iPhone 5. Specific to NFC, should I be surprised, or even disappinted? After all, Apple doesn’t have a great record of driving new features or technologies itself, instead its skill is in reinventing the wheel by polishing the user experience, aided by a strong marketing message and excellant presentation. I don’t think the market for NFC has moved on enough for Apple to start down this road.

Additionally, Apple likes to own the ecosystem but the incumbent payment networks are too entrenched and so I don’t think it can do this on its own right now (or at least it hasn’t worked out the best model to proceed) However, Apple is incredibly cash rich so the acquisition of, or investment in,a payments-related company would not be out of the question. Similarly, in order to maximize NFC, and the different user experiences that it can deliver, it would make sense to feature NFC in a range of products, such as the iPad, Macbooks, etc. and these design upgrades are not yet ready. Whilst having Apple on-board would have been a great driver for NFC – even if only for competitive reasons – I don’t think it will negatively impact the market. This continues to heat up, companies are increasingly launching devices and service strategies are being formulated. Instead of Apple, Google is the threat to MNOs and acting as the spur for others to get their acts together. NFC is progressing in other areas too, such as Windows 8 tablets, something that I expect Apple is keeping an eye on with a view to having NFC in multiple devices (which is where the “lifestyle” side of NFC can come into play). Overall, we are holding our position on NFC and expect to see this continue to develop – possibly with Apple entering a more developed ecosystem in a year or two’s time.​