Interview: Sarah Clark on Near Field Communications [Why can’t I pay for my Red Bull w/ my fone yet?]

Say what you will about how innovative the mobile telecommunications industry is, but these past two to three years have been so boring and uneventful that I may as well have asked my doctor for some Ambien and a few barbiturates, you know, for the weekend. The Nokia N95, when it came out in the first half of 2007, was a technological masterpiece. Sure it was buggy, expensive and a bit large, but Moore’s law, and developers writing/improving software, always fixes those problems. Today it’s difficult to purchase a mid to high end smartphone without GPS and at least a 3.2 megapixel camera. The iPhone, second half of 2007, showed us new and better ways of doing what we’ve been doing with our mobile fones for years. The App Store, using the already established iTunes ecosystem to sell software, is again nothing new since operators in several countries have already had their own walled gardens that sold a handful of applications, services, wallpapers and ringtones, and those purchases, like in iTunes, would show up on your monthly bill. It’s sure as hell more pretty and the applications are orders of magnitude better than any J2ME game I’ve seen, but the concept is ancient.

Android? People call it Google’s attempt to clone the iPhone, and on the surface that appears to be the case, but we all know Google’s whole philosophy is to get you to spend every waking minute of your life in front of a screen connected to the internet while they sit and hope that out of every 100 ads you see you’ll be daft enough to click on 1, even if it’s an accidental click, and they’ll be thrilled that they’ve earned 2 to 3 cents.

Maemo? Nokia’s slow and steady march towards creating an operating system that can compete with what’s state of the art today. It’s practically the mobile version of Ubuntu, meaning it has all the right intentions, and it’s usable enough, but rarely does it do anything new and innovative.

This is where NFC (Near Field Communications) comes into play, a technology I’ve been following since I first read about how the Japanese use their mobile devices many, many, many years ago. When NFC enabled devices start shipping in volume, meaning 1 out of every 3 mobile devices sold during a quarter, we’re going to see the next big “holy shit” moment. The same “holy shit” moment that happened when the N95 came out, the same “holy shit” moment the iPhone came out. NFC will power the next “holy shit” moment in the mobile space, but the question is when will it come?

I’ve recently had the pleasure of speaking to Sarah Clark, Editor of a blog I’ve only discovered quite recently called Near Field Communications World. She wrote a report on the current status of NFC and where it’s heading, and I tried to use my press credentials to score a free copy of said report, it’s worked in the past, but I was denied. That’s one thing I miss about Nokia, being able to expense all these well researched reports written by people who know what the hell they’re talking about, but I digress. She offered to answer a few of my questions, to which I’m very grateful for her time. Our discussion is after the jump.

Stefan: What’s taking so long? That’s the question a lot of people following the mobile scene are curious to know. It feels like we’ve been reading about Japan and their NFC enabled devices forever.

Sarah: Like many mobile payments technologies, NFC has suffered from being over-hyped before the technology was ready to go to market. But, although getting NFC to market has taken far longer than the industry originally hoped it would, all the pieces are now in place for commercial launches to begin to take place this time next year. All the top tier mobile phone manufacturers now have NFC-enabled phones in development, for instance. Yes, both Japan and Korea have well established NFC-like services – but they were developed before international standards were set and they don’t have all the functionality of full NFC.

Stefan: Where do you think we’re going to see NFC take off first, Europe, the United States, or Asia?

Sarah: We expect NFC to take off first in the UK, France, United Arab Emirates, Singapore and Taiwan. These are countries that have run extensive NFC field trials already and where the banks and retailers are already converting to NFC-compatible contactless cards and point-of-sale terminals. Korea is also likely to switch to NFC soon from a technology that is already widely used to let people pay for their transport tickets with their mobile phones.

Stefan: This is a loaded question, but who do you think will “own” the consumer? Will operators be looking to become the next Visa, will banks partner with operators, will everyone get a piece of the pie and if so then who gets the biggest?

Sarah: That’s the $64,000 question! Banks and mobile network operators both want to be able to make money from NFC but we predict that only some of them will succeed. Whether it is banks or mobile network operators or a mixture of the two that become the main suppliers in each country will depend on consumers’ preferences and on how good a consumer proposition each of the players manages to put together.

Stefan: How much does it cost to include NFC inside a mobile phone today, how far has that price come down from say 2007/2008, and how fast will it drop going forward?

Sarah: The cost of adding NFC to a mobile phone will vary from manufacturer to manufacturer but should come in at no more than around $25 on average. As with features such as cameras and Bluetooth, that cost will then drop considerably over time so that, from 2013, it should cost no more than $1 to add NFC to a phone.

Stefan: If you had to guess, when will it be impossible to buy a mobile phone without NFC, similar to how today it’s impossible to buy a phone without a camera?

Sarah: My guess is that we are still a good four or five years away from that day, say 2014 or 2015. If Apple goes ahead with an early launch of its prototype NFC-enabled iPhone, though, things could move more quickly as that will force the other manufacturers to gear up to add NFC to their phones too.

Stefan: What other use cases besides mobile payment and swapping contact information do you think we’ll see emerge as a mainstream use of the technology?

Sarah: There are several major additional use cases:

  • The first will see NFC being added to a wide range of consumer electronics devices such as PCs, TVs, printers and digital photo frames etc so that even people who aren’t very technically aware will find it easy to connect together all the devices in their home. This is the use case that most interests Apple …
  • Consumers with NFC-enabled phones will be able to simply touch their phone to a ‘smart’ poster or product label containing an RFID chip to sign up for a loyalty programme, collect a money-off coupon, download a trailer for a new movie, access the latest travel information or go straight to a product’s website to read customer ratings and reviews and compare prices.
  • Commuters will be able to store their travel pass on their phone and mobile versions of airline boarding cards, hotel room keys and even passports will make it quicker and easier to get from place to place.

Stefan: Is there anything you’d like to tell my readers that I didn’t ask you?

Sarah: I think you’ve done a really good job of asking all the key questions! Do please let me know if you need anything else …

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