The other day, I wrote a post about the need for some form of forum representing end-users of mobile phones, which could define true requirements for handset manufacturers . I contrasted this with the current, highly-biased requirements-setting bodies, whose demands are derived from the desires of the mobile operators, rather than the actual preferences and best interests of real customers.
The GSMA has kindly illustrated my point for me, pronouncing its views on the "need" for handset manufacturers to hurry up with putting NFC into phones - based on a model which would see the SIM card playing a pivotal role.
As far as I can see, the handset-buying public neither needs nor wants NFC. Ignore the inevitable sponsored survey results in the press releases, which are clearly designed to prove a point rather than be dispassionate analyses of real requirements. NFC is a mildly interesting but fairly unimportant innovation, beloved only by large system integrators and the type of blinkered "mobile convergence-ist" who likes to spout nonsense about the phone absorbing the function of your wallet. Most of the NFC applications are "solutions looking for problems", especially the ones around mobile payments.
If the GSMA really wanted to help the manufacturers by "potentially boosting sales at a time when forecasts of device sales are looking significantly down" it would have told them to stop wasting time and money on things like NFC, and instead make sure they prioritise put decent web browsers into handsets, or GPS, or memory card slots, or xenon flashes for the cameras.
Dean Bubley's Disruptive Wireless: Thought-leading wireless industry analysis
13 comments:
Of course, using NFC for payment and security only is deceptive, but I am sure there is a lot more to do with NFC. I hope I will be able to convince you quite soon.
I'm looking forward to NFC and any other interaction-types. The only argument I agree with you is the SIM-centered solution (network operator based) and payment-focus, but I'm hoping the technology is not strangled on payment only. I see NFC just like what happened to Bluetooth, there was no real need; just ideas around it. But it is not only until a technology is introduced that innovation around it happens. Not sure why you are constantly so angry about NFC. Let it be! If it fails at the end, you will be proven right...
ceo
Hi Antoine, CEO
Thanks for your comments.
I wouldn't say I'm "angry" about NFC, I just fail to see its potential importance as being that high, and I'm pointing that out.
It's not in the same category of "clear and obvious failure" as, say, videotelephony or UMA.
In my view there are too many blind alleys that divert precious R&D (and marketing) resources in the mobile industry, especially given the current state of the economy. Prioritising based on groupthink is not wise.
The main problem with NFC is that the applications suggested are too heavily focused on substituting non-phone solutions that already work well (eg credit cards, stored-value travelcards). Far too little emphasis has been placed on new innovative applications, support for developers, and "openness".
I wouldn't go as far as saying the NFC Emperor has no clothes. A better description would be that he's walking around in his underwear.
Dean
NFC is the next big thing for what concerns mobile payment.
Contactless cards are already a reality in many countries in the world, and NFC enabled devices are the inevitable progression.
The difference between Bluetooth and NFC is that, contrary to Bluetooth, NFC will revolutionise the way in which we live. In the next few years we’ll all be purchasing things, paying for bus/train tickets, etc. by using the same tool that we use to make phone calls… the world is moving towards convergence of technologies.
Obviously (and rightfully) there’s a lot of scepticism for what concerns the security aspect of contactless payment and I agree that people would now prefer to see enhancement such as decent browsers into handsets (Although Mobile Internet is not as big as MNOs were expecting it to be), GPS, xenon flashes for the cameras, etc. However is also true that people only know what they have.
Once users will start appreciating the fact that they don’t need to queue anymore to get into a train and/or can perform small purchases just by swiping a mobile phone, you will see that people will start demanding more services to be included in NFC enabled phones.
Lawrence
The skepticism isn't about the security - unless there's an issue with who "owns" the money (user/company) if the operator or 3rd-party finance company goes bust.
The skepticism is about utility.
The notion that you will be "buying things" with your phone doesn't stack up. People have plenty of ways of "buying things" conveniently today - without an extra player in the value chain trying to take a few extra % cut of the transaction.
Mobile payments is overhyped as a general concept *except* where it is *incremental* to current mechanisms rather than *substitutional*. Lots of people in Africa don't have bank accounts or credit cards, hence M-Pesa works well as an alternative. Money transmission between friends or oversees is tricky - hence MiPay and Beem and various others using SMS.
But using a phone to replace cash, debit cards, Oyster-type cards is mostly pointless, because *they already work well*.
Using a phone - with NFC or another mechanism - just adds complexity. You increase lock-in to the operator (what happens to your balance when you churn?), you introduce the need for separate payment & mobile balances (don't tell me people will have ordinary purchases added to their normal phone bill or debited from their prepay!). You add complexity around the user interface on the phone, roaming gets trickier, you may be dependent on cellular coverage or battery life and so on.
And worst of all - the retail industry has to support yet another platform during the transition period - let's say 10-20 years to be optimistic.
Dean
Dean, there is one comment in your article that doesn't quite apply to the UK market anyway... "handset-buying public". Lets face it in the UK the majority, if not all of a handset's cost are subsidised by the Operator - to a lesser extent for prepaid and a much greater extent postpaid. Given that crucial fact, doesn't the operator have a right to influence those handsets to ensure that their revenue earning capabilities are maximised? Lets face it, if you don't like the subsidised handset from your Operator you can just buy a SIM free one of your own choice at your own expense!!
But using a phone to replace cash, debit cards, Oyster-type cards is mostly pointless, because *they already work well*.
Dean, I agree with your views on NFC in mobile phones in the main, but *they already work well* is not necessarily a barrier to something being useful or taking off.
Digital cameras already worked well, as did mobile phones. It didnt stop them being combined to the point I cant imagine owning a phone without one.
The way people pay for things has changed DRASTICALLY over the past few years, and I think NFC is just an extension of these changes. For example, how many people would have used a credit card 5-years ago to pay for lunch at McDonalds? How many people actually write checks for things today? Looking at these trends, I can definitely see a future where people buy things with their mobile phone -- as long as the operators don't screw up the usability.
yeah I'm with you Dean, I don't like the idea of using my phone to pay for things...
It's another potential layer to payment services that I will end up paying a premium for to use... (for the "convenience" or however my mobile operator decides to market it (being centralised to the sim card))
(if that made any sense)
Someone is going to have to make money out of the technology & service, and i will inevitably pay for it - why not just make my smart chipped credit card payments cheaper? It's a grudge payment anyway, why would i pay more for an incremental increase in what someone else defines as convenience?
Joseph Juran: quality is fitness for use.
And I personally would never find a use for it.
Dean,
NFC technology is compliant to the new contactless cards readers deployed by all major cards providers (Visa, MasterCard), hence it wont be difficult or expensive for the retail industry to adapt to something they will already have in their shops.
But then NFC is not only about payments… NFC is also about P2P communication, about smart posters, e-coupons, interactive city guides for tourists and countless other applications that help making people life easier.
Obviously the big players out there want to make money out of NFC and Pay-Buy-Mobile is the most obvious source for revenue, but the success of the NFC technology depends also on the success of the technology as a whole.
LaUrence
Don't forget that it is the banks who have the most to gain with NFC. That's why they are pushing wireless so hard, and that's why you no longer have to sign for purchases less than $25 (and in some cases less than $50).
Antoine,
I think that overall it is about applications and not technology. It seems to me that there is too much focus about a technology that will be ubiquitous on payments only. We are starting to look at the application of RFID and NFC for tracking carbon emissions. The consumer should be able to use their NFC enabled mobile to query any product in the shop with a carbon label as to it's carbon footprint. This is an application that will resonate with the consumer and has nothing to do with payments.
Post a Comment