What is NFC and has it moved beyond hype?

Mobile phones are expected to play a significant role in commerce and identity management in the future and one technology that would make this possible is Near Field Communications.

Near field communication, or NFC, is a set of short-range wireless technologies, typically requiring a distance of 4 cm or less which are designed to interact with consumer electronics, mobile devices and PCs. NFC is similar to radio frequency identification, except that it contains a tag and a reader, facilitating two-way communications. NFC always involves an initiator and a target; the initiator actively generates an RF field that can power a passive target. This enables NFC targets to take very simple form factors such as tags, stickers, key fobs, or cards that do not require batteries. In short, just by waving or tapping the phone, the money or the content can be transferred across devices.

Near Field Communications (NFC) has been in the news since its inception in 2002 by Phillips and Sony. It is one technology that has a lot of potential but still reached near death due to virtually no support from operators and banks. In the last few years a number of trials around payments and access kept the technology alive. Gartner has a concept of hype cycle which it uses effectively to predict the evolution of any technology. It shows that NFC has already crossed the peak of inflated expectation and is likely to get lower mind space going  forward before it starts to get back (refer to adjacent chart).

AT&T, Verizon and T-Mobile last month said they would work with Visa and MasterCard on their Isis joint venture, which was established to form a nationwide infrastructure for NFC-enabled mobile payments using mobile handsets in the United States. This coupled with interest in NFC from Apple and Google has resulted in an increase in forecast by many analysts. Currently close to 50 million NFC enabled handsets are sold across to world which is less than 5% of the handset market. However, the NFC enabled devices are  expected to increase at least ten folds over the current level (Refer the forecast below)

The forecasts from different analyst firms vary a lot on the NFC device projections but all agree that it would be significant by 2015. 

Here is a Video on the possibilities on NFC technology. Enjoy!!!

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Disclaimer: The views expressed in this article are my personal views and do not reflect the views of my employer.

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