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Apple Predicted to Adopt NFC in iPhone 6 as Core Technology for Mobile Payments System

nfc_logoRumors of Apple incorporating near field communication (NFC) technology into the iPhone have become a yearly ritual, but Morgan Stanley analysts believe that Apple may finally be poised to adopt the technology as part of a push to break open the mobile payments industry. In a recent note to investors, analyst Craig Hettenbach points to possible licensing deals, company financial disclosures and patent filings as the basis for this claim.

Morgan Stanley believes NFC is ready to take off, and Apple could be the force that drives its widespread commercial adoption. Though Apple has been publicly silent on NFC and has in fact pursued alternative technologies such as Wi-Fi and Bluetooth for short-range communication features like AirDrop and iBeacons, there is little doubt the company is exploring this short-range wireless technology. A recent patent application describes a secure, NFC-based wallet that allows customers to make purchases wirelessly through their phone, and Apple is in the process of updating its in-store point-of-sale system with one that supports NFC.

According to Morgan Stanley, Apple is choosing NFC as the key technology for its mobile payments system, with semiconductor company NXP likely providing the necessary wireless hardware. NXP has an existing relationship with Apple, supplying the M7 motion-sensing chip found in the iPhone 5s.
NXP is well positioned to participate in Apple’s mobile payments ecosystem. The company signed a licensing agreement with a customer in Q4’13, who we believe is Apple, related to its emerging ID business. A recent patent filing by Apple revealed potential use of NFC and secure element, which we think could be embedded. NXP has also accelerated R&D spend to support a new program related to the IP deal, with revenue expected in 2H, lining up well with the launch of iPhone 6. We see this potentially adding $250mn in sales and EPS of $0.25 in 2015.
A number of rumors have suggested Apple is actively working on a mobile payments system, with Eddy Cue allegedly approaching retailers about the company's desire to handle payments in retail stores and elsewhere and longtime online store executive Jennifer Bailey shifting role to oversee the payments initiative. While stopping short of confirming mobile payments, CEO Tim Cook also admitted during a recent earnings conference call that mobile payments were "one of the thoughts behind Touch ID."

Morgan Stanley is certainly not the only source to be sharing rumors of NFC support for the iPhone 6, with Brightwire citing its own sources earlier this month and high-profile KGI Securities analyst Ming-Chi Kuo making his own claims last month.

Related roundups: iPhone 6, Apple Pay

Top Rated Comments

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23 weeks ago
Insert

"Apple will never adopt NFC"
"NFC is dead technology"
"NFC is a fad"



:rolleyes:
Rating: 18 Votes
23 weeks ago
NFC? Meh. I prefer AFC.
Rating: 12 Votes
23 weeks ago
The only reason for any resentment to NFC on this forum has always been the fact that to admit that NFC is is a good thing is to admit that iPhone is lacking an important feature. The same is true about many other technologies (smaller tablets, larger phones, pressure sensitive pen, OLED displays and even LTE at some point). The silliness never stops.
Rating: 7 Votes
23 weeks ago
I'll believe it when I see it, but I really doubt Apple will add NFC after all that they've done with BTLE.
Rating: 6 Votes
23 weeks ago

Insert

"Apple will never adopt NFC"
"NFC is dead technology"
"NFC is a fad"



:rolleyes:


NFC makes sense for payments. Transferring of content? Not so much.
Rating: 5 Votes
23 weeks ago

Insert

"Apple will never adopt NFC"
"NFC is dead technology"
"NFC is a fad"



:rolleyes:


Insert "anti fan-boy" fan boy statements here.
Rating: 5 Votes
23 weeks ago
So, do I have to bump the iPhone against the cash register in order to pay? :)
Rating: 5 Votes
23 weeks ago
I thought I had seen articles saying that NFC had more or less failed in terms of adoption and that even google wallet was moving to alternatives. It seems to me like the iBeacon stuff was gaining traction. Why would Apple give up on iBeacon and move to something that wasn't being adopted by others?

Edit: From a previous MR article
"Apple has steadfastly refused to adopt NFC and because it has fallen out of popularity, Google recently ceased requiring NFC technology in order to utilize the app on Android, shifting its focus from mobile payments to focus on loyalty cards, merchant offers, and discounts."
Rating: 4 Votes
23 weeks ago

So, do I have to bump the iPhone against the cash register in order to pay? :)


If your iphone is in your breast pocket you have to chest pump the shop attendant to pay.


... in all seriousness the NFC will be in the iWatch not the phone. It will be the USP of the iWAtch IMO. If your have your phone with your watch you just reach out and wave at the counter to pay... easy
Rating: 4 Votes
23 weeks ago
I see a lot of questions about why you would want NFC, when we already have a bunch of comm methods. Of course, that's the whole point: each method has its own purpose and strengths.

For example, I would use cellular to send to someone far away. At the same party, we might be able to set up a direct WiFi connection (if we have the same phone maker).

With NFC transfers, the purpose is to be able to send/share things with someone next to you, without knowing each other's details like email address or even phone number... or having to edit the message to send.

You simply hold your devices back-to-back or close together (depending on phone or tablet) while viewing the item you wish to transfer. A picture of what will transfer pops up and you click to confirm. Depending on what's being transferred, the receiving device may show a receive confirmation that they must click. Done.

Examples of easy transfers that my Android using kids and I do:

[LIST]
[*]Looking at a web page -> touch -> other phone opens browser to that page
[*]Looking at a map -> touch -> other phone is looking at the same location
[*]Navigation directions -> touch -> other phone now has same directions
[*]Watching a YouTube video -> touch -> video opens on other device
[*]Looking at photo(s) -> touch -> transfers photo(s) to other device
[*]Looking at a contact -> touch -> other phone gets copy of contact
[*]Using an app -> touch -> other phone opens to that app in the Market
[*]Viewing a contact-> touch -> transfers contact to other device
[/LIST]

It's pretty handy when you're right next to someone, and it's an anonymous way to transfer stuff. E.g. someone stops you for directions, you could bring them up on your phone and touch phones to transfer. No phone number or email address or other personal info is necessary.

It's quick and easy and private. And obviously meant only for transfers to someone next to you. Otherwise, you'd use a different method that requires more setup, like Airdrop or email or texting... which also usually needs you to edit the info to send.

-- Universal transfer

Perhaps the best part, is that this kind of easy transfer can be OS agnostic, unlike Airdrop or Beam. Part of the NFC spec is that devices can support a simple protocol for sending request types. E.g. a URL, a photo, an address. It's totally up to the target device to decide what to do with that info: pop up a browser, or initiate a WiFi photo transfer, show a map, etc.

In theory, any NFC equipped device can talk to each other. In reality, some device makers have left out some transfer types. For example, I think that you can touch and transfer URLs between Android and Blackberry NFC equipped phones. PDFs or contacts? I don't know.
Rating: 3 Votes

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