Why I’m Crossing NFC Off My List

I’ve got a list of stuff I would like to read up on and play with, and NFC has been on that list for a while. I’ve been really excited about the secondary stuff that should go along with NFC. For a long time folks inside the industry have been vocal about NFC not being “just about replacing your credit cards with your phone”. Theoretically NFC should also open up all kinds of interaction with the real world. We had a Mobile Monday Silicon Valley panel on NFC last night to talk about some of the overall issues. I have to admit however that I feel like the whole thing is headed straight for a brick wall at high speed. Even though I would love for it to work, it’s not going to work.

NFC as it stands is setup to suffer from exactly the same set of issues that has effectively killed Bluetooth as everything except a wire replacement protocol. The problem is that when NFC pushers say that NFC is “about more than just replacing your credit card with your phone” what they really mean is that NFC could be about more than just replacing a credit card. The decision about how capable or restricted an NFC stack is lies with the equipment manufacturer. And generally speaking folks don’t just toss random features into phones because they’re available. They do so when it’s really necessary, normally because of consumer demand.

Right now the NFC field is going through something very similar to what the GPS world went through. I’m sure some of you will remember that back in the deep dark recesses of pre-history not every smartphone had a GPS chipset in it. Those of us geeky enough to care went out of our way to find the models that did have GPS support so that we could play around with our own little hacks. But back in those days the consumer public didn’t really care about GPS support in phones. Back in those days the only folks who were clamoring for GPS support in every handset were the folks who were selling navigation or mapping apps for phones, and they were charging way too much, and not sharing revenues back with the manufacturers. So the environment was pretty well jammed up.

Eventually Google Maps came around though. And a meaningful free mapping application with fantastic search changed the potential value of having a GPS chipset in a handset, made the handset more attractive to customers across the board, resulted in more sales for handsets with GPS even if the manufacturer couldn’t sell additional GPS related apps, and we ended up where we are today. Generally that pattern is true, to get a new technology out into peoples hands there has to be a killer application to drive it. And the version of the technology that gets deployed will be the minimum version required in order to make that kill application work, and that ends up being the new standard.

Contrast the GPS uptake with the way Bluetooth has worked out. The Bluetooth technology folks early on used examples ranging from the headset connection version everyone knows through syncing all your data between devices automatically. There’s a whole ton of potential functionality in the Bluetooth specs, and at this point it probably is possible to sync data wirelessly and automatically in some subset of devices. However, the killer app there was connecting a wireless headset, so that’s all that anyone really uses Bluetooth for these days. And on lots of devices that’s all you can do. I’m sure that statement is going to piss of a whole industry. But tough, it’s true, deal with it.

With NFC the killer application appears to be payments. So my pressing fear is that the version of NFC that gets deployed to the devices out there is going to support the subset of features required to be able to participate in payments, and that’s it. Now, I know, the subset of stuff required to support payments potentially covers a few other areas like being able to scan other styles of tags. While I understand some of the convenience points there from a consumer perspective, there are some massive downsides from the point of view of an independent app developer. MASSIVE! Having a fully functional system requires a new bit of hardware even if I have an NFC enabled phone. That’s a huge barrier to experimentation and uptake for anyone except the folks with deep pockets and long timelines.

I was hoping that after the discussion last night I would find out a few things I was unaware of. I would be able to grab my Nexus S and with some quick bits of hackery potentially do something interesting. While I admit that NFC could potentially deliver some wins for a subset of cases out there, it’s not something that an independent app developer needs to take into consideration when building applications. I’m hoping that things shift somewhat as this evolves, but as it stands I’m taking NFC off my list of stuff to find some time to play around with. I just don’t see any areas in which it’s close enough to being a practical component of mobile development for someone trying to build a new business in mobile. Those of us looking for additional ways to make applications more context aware are going to have to stick with other techniques for now.

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8 Responses to Why I’m Crossing NFC Off My List

  1. King Yiu Chu says:

    Hi Mike,
    I get your point about the killer app and definitely Payment will open up the industry for NFC. But more importantly, interaction with objects has huge potential from a marketing perspective.

    I probably don’t have to explain you, (but will do for readers) that with NFC, every object like a bycicle, car, my phone, my jacket, a bench in the park, the lamp on the restaurant table, the poster behind the window of a real estate agent concerning a house, etc… will all contain NFC tags of less than a cent.

    This makes the object touchable to get:
    - information about the object
    - leave comments on the object
    - checkin on the object
    - read reviews about the object
    - buy the object
    - etc…

    The number of touches on NFC objects could be bigger than the number of clicks on Google Ad words links. (talking about business size potential).

    That said… this is 100% interest for Google to get this done fast! That’s why they are the first big device/platform play that introduced NFC.

    From the infra stucture point of view… a lot of products already contain RFID tags which we aren’t aware of but they were embeded for customer support / complaints /tracking and maintainance reasons. As soon as these tags will be modified to be able to read with NFC devices as well the market will explode with possibilities. Only the manufacturers need to realize this potential as well.

    So to summarize… yes it’s gonna be a challenge for payment providers/operators/banks to do a nation wide rollout of NFC payment options but Google has big interest in this business and for sure I’m convinced they know this and get this.

  2. King Yiu Chu says:

    Oh, I forgot to add one thing…
    You can buy a testing kit from NXP/Mifare (they developed the NFC chip inside the Google Nexus S) to test this for less than 100 dollars.

    Just search for “Mifare NFC kit” and you’ll find different options. Here is one option: https://crownhill.co.uk/product.php?prod=2147

  3. miker says:

    I appreciate the feedback. But that’s kinda my point, that it’s too expensive and custom. I heard this same “everything will be tagged and trackable for less than a cent per passive tag” argument the first time around with the RFID craze in 2003. Didn’t fly that time, and I don’t see enough different right now to assume it’s going to fly this time. Ubiquity of smartphones is an enabler, but not sufficient.

    There needs to be a strong reason to tag everything, and THEN we can assume everything will be tagged. If you start from assuming everything is tagged and then list applications, it’s a non-starter. Reverse argument. Explain why everything is tagged, and if that one point is compelling, then we can discuss the follow-on.

  4. Pingback: Google Ditches Barcodes for NFC

  5. Do you think Google buying into the game now is going to change things? They’ve done it once with Google Maps and GPS, and while not all of their apps have been a wild success (hello Buzz, Wave), the potential is there. Not to mention that more and more younger generations are winding up with smartphones in their hands, and they’re all about spending money and showing off the latest and ‘greatest’ functions to their friends. If a fad caught on, it could make a difference (albeit possibly a very temporary one).

  6. miker says:

    If the effort put into the NFC implementation on the Nexus S is any indication, it’ll be good for scanning tags and doing payments, and that’s it. The main driver for Google seems to be around tying together their efforts to drive traffic with payments. Makes sense, that would be a lucrative area for them. The updates in the latest SDK extend those functions quite a bit, which is nice. But unless this works across the board, it’s not a great tool. If before I transfer something to you via NFC I need to stop and ask “Hey, what version of Android do you have?” it’s not going to deliver a great user experience.

  7. Cordell says:

    Thank you for your thought-provoking analysis. A few minor details might be wrong, though. If I’m not mistaken, GPS in cellphones was mandated by the FCC to support E911 location; location by cell tower triangulation was deemed too inaccurate.

    That said, you are likely correct in your assessment of the difficult road ahead for widespread adoption of NFC technology. Even with Walmart’s efforts among its suppliers, RFID could not displace barcodes; the older technology was simply too cheap and the advantages that RFID promised could be had by other less expensive means. A poor return on investment is the death knell for most technology. This analysis may also partially explain why Apple reportedly backed off including NFC from their upcoming iPhone 5.

    NFC may yet slip into the mainstream via a side door well removed from smartphones. Here in the SF Bay area, the Clipper Card, which uses NFC, has been introduced to simplify payment on local public transportation systems. It’s basically the same idea and technology as London’s Oyster Card and other public transport payment cards in use elsewhere.

    The card, though currently limited to public transportation payments, essentially replaces cash and eliminates the high cost associated with a credit card to make a minor, (less than $10), purchase. If these NFC cards are standardized across cities and perhaps integrated into standard credit/debit cards to circumvent the chicken-and-the-egg problem limiting widespread adoption, it could displace cash. It’s effectively a NFC version of the increasingly popular prepaid debit card.

    For consumers, the card would eliminate the time, inconvenience and potential cost of getting cash from an ATM and, at the same time, limit potential losses from a lost debit card. For merchants, it would reduce or eliminate the cost of low value purchases.

    Unfortunately, the card networks such as Visa and MC would undoubtedly oppose this development. Nevertheless, NFC technology is sufficiently cheap and small that those companies promoting its widespread adoption such as Google could simply offer NFC stickers to attach to the back of our credit/debit cards. Once enough consumers have this technology in their hands, merchants will then adopt it as well. At this point, smartphone apps can then make use of NFC too.

    Nevertheless, the technology’s widespread adoption will likely be a long, circuitous process as you say. Circulating cheap tags to consumers, rather than pushing expensive readers into cellphones, seems the better approach here. In the meantime, barcodes and QRS codes will dominate tagging applications.

  8. miker says:

    Widespread adoption of GPS wasn’t driven by e911 however. Once GPS was getting picked up in larger numbers, the power consumption was driven down, production costs down due to volume, etc. Then it could be mandated and used as a replacement. So I stand by my original assertion about GPS uptake.

    I’m happy you mention the Clipper Card actually!! Cause that’s part of the backstory I left out. After the Mobile Monday I was interested in playing around with NFC. I knew from an accidental discovery that my Nexus S could pick up my clipper card as a tag. So I figured maybe I would play around with prototyping up something using a few Clipper cards just so that I could distinguish which card my phone was by.

    It might be technically possible to do. But after poking at the existing SDK, and the example code, and fooling around with the cards and the phones, I can’t get my phone to return anything about the cards except “unknown tag type”. Which is actually where the insight comes from that the secondary benefits of NFC are too far away from the main usage to be considered coupled benefits.

    I have a few NFC devices and some example code, but still I can’t make them do something useful. I contrast that to 2d barcodes, which had exactly the opposite effect. Once I started playing around with them I immediately had a working prototype and was seeing more applications.

    Put side by side with the existing techniques NFC is an infinitely more developer hostile setup. That would be fine if there were end-user benefit. But the only people who seem to be benefitting from NFC are the transaction middlemen and hardware folks.

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