So autumn or fall, as it’s known in the US, has arrived and this is the time for the new crop of Apples -and the release of the new Apple iPhone 5 - but is it a great harvest? As we know, Apple is a master at developing the hardware and look, touch and feel of mobile devices, but have they missed a trick with the lack of NFC this time?
Android and Microsoft (Windows Phone) devices are going to be the defacto operating systems for NFC-enabled services, leaving Apple and iOS way behind. I have seen various comments from Apple and they have stated that they are waiting for a more mature market, but in Europe there are a large number of credit cards, metro systems and new and innovative services based on NFC and even in the US, Google Wallet has been rolled out with key network operators. There is an expression which is used in the UK - “To spoil the ship for a ha’porth (a very small old coin) of tar” – which is highlighting the concept of a false economy- and it looks like Apple has just spoiled its ship. They have probably saved less than $2 for NFC hardware but it may have cost them a lot more in lost opportunities and customer acceptance.
Secure mobile payments is a very significant and growing market segment and based on what we are currently seeing in the industry, will be the long term payment tool for all of us. Apple’s recently launched Passbook App stores digital copies of flight boarding passes, event tickets and coupons and brings you digital payment and account handling services. It uses the display and optical reader (camera) to display and read barcodes or QR codes and images that merchants provide in stores to redeem a coupon or at airports to allow you to check in; however, it is only a one way authentication process and therefore will never provide any real security with mutual authentication. These types of image based systems are never really secure. Applications such as the VISA wallet app on the Samsung Galaxy S3 used at the London 2012 Olympics, Google Wallet and similar systems offer increased security, and in particular they offer increased transactional security when compared to an image based system. In the case of NFC, full communication can take place with the NFC chip providing full mutual authentication and cyphering of the communication.
The question is, is this the start of the slippery slope to a decline in innovation by Apple since the loss of Steve Jobs and with Apple’s rivals moving forwards with key innovations in this area? It is a sad fact that Apple has not embraced NFC and has delivered an uninspiring product to the market, which is not helping to minimise fraud in mobile related transactions – especially since this is an area that is rife. Is Apple now just interested in patent wars? Only time will tell.