The Next Technology from Apple

Apple didn't invent the personal computer, but they were the first company to make it easy enough to be adopted by the general public. Same story for mp3 players, music libraries and now tablets. So what's the next big technology that Apple will mainstream? Glad you asked.

Oyster_NFC_mobile_O2.jpg
Today you can use iTunes to buy music, movies, apps, and other digital content, but you can't use it to buy physical products. There have been rumors that because Apple has been hiring NFC engineers, that's exact where they're heading -- payments. Near Field Communciation (NFC) is a short-range wireless standard used to exchange data, like payment information, loyalty number, or coupon codes. Instead of swiping a magnetic-stripe card, consumers will wave their NFC-enabled mobile phones.

Its not so compelling to replace one credit card, but if your NFC-enabled phone could replace all the cards in your wallet and speed-up the checkout line then it becomes more interesting. And from Apple's perspective, taking a cut of payment transaction would be enormously profitable.

That's probably why the mobile carriers are also racing toward a solution. AT&T and Verizon have a project called Mercury that will enable mobile phones to pay for goods in stores and have the cost posted to the consumer's monthly service bill. This would completely bypass the banks (and potentially turn mobile operators into banks).

Naturally Visa, MasterCard, Amex, and Discover are not sitting still. They have several mobile payment projects ongoing across the world.

In France, the major mobile carriers, banks, and technology providers are cooperating to facilitate a large NFC pilot in Nice that is a pre-cursor to a national rollout. This was the same approach they took to adopt smartcards, a technology that never jumped the Atlantic with any widespread adoption.

Nokia has already committed to embedding NFC chips in selected smartphones starting to 2011, and if Apple's next version of the iPhone does the same, it may be enough to spur adoption. Retailers should certainly be monitoring this situation and be ready to pounce on any opportunities.

Comments:

It would be incorrect to say that Apple would be pioneering anything in this space - also misleasing to suggest that Nokia will be following them.

Why, because Nokia has been doing this in the Finnish market for ages. Possibly a decade. You could get on a bus in Helsinki and pay by waving your phone nearing, in my memory back to something like 2003 if not earlier.

Also in places like London the "Oyster card" is already in the pockets of probably 75% of public transport users. Has it been merged with the mobile phone there, no? But its mainstream, its being used at every pubic transport point and most newsagents have a machine where users and add funds to their card. That's pretty mainstream if you ask me.

You wouldnt be impressing the average Londoner if you presented this concept as a novel idea or an "innovation" just by the fact that it had been slapped on a phone.

It's the US where things like this are only now being taken seriously, but that's a world of difference from being able to say that Apple is mainstreaming this. Its been around and widely used in many European countries.

Posted by Sam on October 18, 2010 at 06:47 PM CDT #

Sam, I agree that contactless technologies are well accepted outside North America, but they have yet to make an impact in the US. I also agree that Apple isn't inventing anything new, but they are quite good at repackaging technology for mass consumption. If they incorporate NFC, that will be the catalyst to spur adoption in the US, and then we might catch up with the rest of the world.

Posted by David on October 19, 2010 at 01:34 AM CDT #

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David Dorf, Sr Director Technology Strategy for Oracle Retail, shares news and ideas about the retail industry with a focus on innovation and emerging technologies.


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