A new white paper compares the advantages and disadvantages of alternative NFC form factors — and looks at how much market share each technology is likely to gain.
A new white paper by telecoms management consultants The Human Chain has set out to examine the business case for new NFC form factors such as NFC stickers and MicroSD-based solutions.
‘Alternative NFC form factors — Will they gain market share?’ examines whether the technologies can gain market share and how they could potentially impact development of integrated NFC handsets.
“We’ve all heard the technology suppliers talk up NFC technology, but there are still significant questions that the industry needs to address if it is to take off in the way that some analysts predict,” says Tim Jefferson, managing director of The Human Chain and author of the white paper.
“Stickers can save start-up costs and be quicker to market compared with other form factors,” says Jefferson. “They also benefit from well-known production and distribution channels and existing business models and routes to market.” But, Jefferson adds, “Mobile Network Operators (MNOs) and carriers wouldn’t have any control of unpowered stickers, so their role in such a technology should be considered.”
Powered contactless stickers, which use batteries and connect to the mobile phone using Bluetooth technology, also have issues, says Jefferson. “The technology is great in theory, because it provides an easy way to add feature-rich NFC functionality to the mass of installed mobile handsets worldwide… But size and battery life could be a problem — and you shouldn’t forget the user experience. Sometimes people find pairing Bluetooth technology with a handset simple, but at other times it can be very difficult and they can stop trying out of frustration. Furthermore, there is no existing production capability or established distribution chain for these types of devices.”
Turning to microSD-based solutions, The Human Chain is more positive. “Integrated uSD cards are an obvious winner as they have a similar read/write range to integrated NFC handsets and could work in a plug-and-play mode, opening up the world’s smartphone market to NFC and offering the potential to lead NFC deployment while the wait for integrated handsets continues,” says Jefferson. “But even here, there are questions. Will they work as well as existing contactless A1 form factor cards? And how will they work with smart posters? Furthermore, new players are entering the market and their business models may not be acceptable to MNOs.”
The report also looks at other NFC form factors, including watches, tags and tokens, but concludes that their benefits may be limited. “The question is whether these can ever be more than niche products for certain targeted sectors,” says Jefferson. “While they can be good at creating consumer awareness of the technology, it is difficult to see that any of these will go mass market in a realistic time frame.”