Will Apple include NFC in the iPhone 5 and iPad 3?

A couple of days ago we speculated that Apple may be including NFC in the iPhone 5 and iPad 3. The lack of credible, reliable rumors and evidence to support our leap of faith has bothered us ever since. For around a year now pundits have been speculating about whether Apple will be including NFC in the iPhone 5 and more recently in the iPad 3. For the second half of last year the press thought it was a certainty that Apple was launching an NFC iPhone 5, but early this year reports started circulating that Apple would not be supporting NFC until the iPhone 6. We wanted to look at all the rumors that have circulated regarding Apple’s plans for NFC in the iPhone 5 and iPad 3 to see whether any clues that would allow us to get a clearer picture of whether or not an NFC iPhone 5 or NFC iPad 3 is on the cards.

Rumors that have suggested there will be no NFC in the iPhone 5 or iPad 3

Most Apple NFC iPhone 5 and NFC iPad 3 neigh sayers, have reported between March and May this year. The information has either come third party through Apple or large scale manufacturing suppliers. If this is misinformation, it has worked. Many industry people now think there will be no NFC iPhone 5 until next year. The NFC iPad 3 rumors are too new, but it is presumable that if the iPhone 5 doesn’t get NFC nor would the iPad 3 if indeed it is due to be released at the same time. We have tracked the main reports that suggest that the iPhone 5 and iPad 3 will not have NFC and they appear to emanate from just three sources.

Berstein Analysts: “Apple’s next iPhone, said to be called the 4S, will not have the mobile payment support through NFC (near field communication).” – May 16th, 2011

The Independent: ”Sources at several of the largest mobile operators in the UK revealed Apple had disclosed in meetings that it would not be including Near Field Communication (NFC) technology – which enables payment for products with a wave of your phone on a reader – in the latest version of the iPhone, be it the iPhone 4GS or the iPhone 5. One source close to the discussions said: “The new iPhone 5 will not have NFC, Apple told the operators it was concerned by the lack of a clear standard across the industry.” Yet Apple is understood to be working on its own NFC proposition, which would link payments through iTunes. It hopes to introduce the technology in a handset likely to be released next year,” said Nick Clark. – March 14th, 2011

NFC Times: “We speak to a whole range of suppliers in the industry, and the balance of opinion we’re getting from those who really count is it won’t be in there,” Alex Green, IMS Senior Research Director reported Dan Balaban on April, 28th 2011, stating that he didn’t believe the iPhone 5 would be NFC enabled. “I don’t believe that the iPhone 5 will have NFC payment, but I do believe there is a 60% chance that it will have either service discovery, peer-to-peer (communication), or both due to the recent patent win and the Japanese crisis giving them a delay on finalizing orders and manufacturing of components,” said Einar Rosenberg, CTO for NFC application developer Narian Technologies.

NXP Chief Executive Richard Clemmer told the Reuters Global Technology Summit, “I’d be surprised if Apple’s APPL.O iPhone 5 has NFC,” adding that he expected Apple’s iPhone 6 to come out next spring. Although Clemmer would not speculate on Apple’s NFC plans, he said every smartphone manufacturer was working on adding it. Reported Roberta B. Cowan – May 19th, 2011

Rumors and evidence that suggests there will be an NFC iPhone 5 and NFC iPad 3 is mounting

Rumors and evidence that suggest the new iPhone 5 and iPad 3 will be NFC-enabled is just as strong. More heavyweight media portals have come out and refuted neigh sayers’ reports. We will take a look at reports that suggest Apple will include NFC in the iPhone 5 and iPad 3. We will also examine complimentary evidence that has surfaced to support the rumor that the new iPhone 5 and iPad 3 will rock NFC.

Forbes: “From what I hear, it is possible the iPhone 5 will include NFC. An entrepreneur who is working on a top-secret NFC product told me today that he believes the iPhone 5 will have NFC and cited a friend who works at Apple as a reliable source for the information,” said Elizabeth Woyke on March 17th, 2011. “To further bolster his statement, the entrepreneur said that manufacturers of NFC readers – whom he has been talking to for his own product – also expect iPhone 5 to have NFC. These manufacturers are gearing up for the additional NFC traffic the iPhone 5 will bring, likely this summer, said the entrepreneur,” she added

The New York Times reported: “According to two people with knowledge of the inner workings of a coming iteration of the Apple iPhone — although not necessarily the next one — a chip made by Qualcomm for the phone’s processor will also include near-field communication technology, known as N.F.C.”

“One person familiar with the new Apple feature said the phone’s credit card information would be tied to information currently used on iTunes, which would make it simple for customers to set up the new mobile payment method on the iPhone,” reported Nick Bilton on March 21st 2011.

Benjamin Vigier, an NFC mobile wallet expert, was taken on as Mobile Commerce Product Manager at Apple, according to mainstream media and LinkedIn. Vigier has been at the company for 1 year and 1 month. This is plenty of time to develop a platform compared with the few months Google took to put its Google Wallet together. Apple must want a ROI for Vigier and his team soon. Vigier has worked with NFC technology since 2004 where he managed “embedded intelligence” in charge of NFC SIM cards for Bouygues Telecom. He then went on to Sandisk to work on their NFC mobile commerce activities until 2008 when he moved to mFoundry, where he specifically worked on Mobile Wallet, Payments and NFC projects. Interestingly enough, in this position he worked on projects as diverse as Starbucks Card Mobile app and PayPal Mobile. He also states on his LinkedIn profile that he worked on an NFC Wallet for a US bank. It seems unlikely that Apple would utilize such a specific skill set for mobile commerce specific to their retail store experience and invariably probable that Vigier is working on the system that the iPhone 5 and iPad 3 will run on for NFC mobile wallet services.

Apple now has north of 200 million iTunes accounts with credit cards attached. This is a major advantage for the company to build an NFC solution that is managed through iTunes and that acts as a mobile wallet platform, where only an iTunes token is needed to connect the account to an iPhone 5 or iPad 3. Apple will be weary of allowing competitors to lure these account holders away and have them getting used to a different provider’s mobile wallet. If Apple wants to be a dominant NFC payments player, it must act while the industry is still finding its feet and before Google has deployed its Google Wallet en masse – the iPhone 5 and iPad 3 is its opportunity. This is said to be happening in the fall and if Apple waits until next September to launch its competing product it could lose massive ground to its foe. Google is also said to be building its NFC Google Wallet for iPhone 5 and again Apple would not want consumers to purchase third party NFC cases and to allow to gain a foot hold on its platform for mobile payments with the Google Wallet instead of using Apple’s own mobile wallet offering for the iPhone 5 and iPad 3.

Apple iPhone 5 and iPad 3 patents

Apple has applied for a plethora of patents that potentially relate to NFC in its iPhone 5 and iPad 3 products. Apple as a company has put a lot of development dollars into NFC, probably more so than any other company on the planet. They have yet to see any ROI on the patents and work it has performed. The sheer level of patents lead credence to the rumor that Apple needs to get its vision of an NFC ecosystem to market now that Google and its Android OS has beaten the company to the punch. Below we look at a few patents that have been applied for. We feel sheer level of investment and apparent interest that Apple has in NFC suggest that it is indeed ready for an NFC launch and that it needs to step into the fray if it wishes to dominate the industry. We have posted sources with all patents that have been registered with the US Patent & Trademark Office.

• The Apple iTravel / iCruise app was patented and has been known about for well over a year. Providing services to travelers and allowing them to purchase tours and various other offers from straight within the app. This patent can be seen on Patently Apple. The app also is reported to support airline ticketing and boarding pass management.
• iKey patent was published in February 2010. The patent uses the term “Trusted Service” which shows that Apple is considering becoming a Trusted Service Manager (TSM), and defines ways to log into computers and other devices using an NFC key identifier. The naming is in line with Apple’s Key Chain which is the password storage system within Mac OSX.
• Touch screen RFID tag reader patent. A novel patent that allows an icon on a touch screen to become an NFC tag. US Patent can be found here.
• Peer to peer financial transaction devices and methods patent outlines personal NFC payments to other individuals using an iPhone 5.
iTravel app could be first used on the iPhone 5 and iPad 3
• Grab and go 2009 patent, which in the patent application was called the “System and method for simplified data transfer” which illustrates how NFC could be used for consumers to transfer files between Apple devices.
• iGroups is an NFC and Bluetooth social media patent that Apple patented back in March of 2010.
• e-wallet patents have been applied for since April last year and appear to identify a NFC mobile wallet app that has support for banking inclusive of ATM authentication.
• Patently Apple found concert tickets + NFC payments app is a patent application that allows consumers to purchase tickets via their iPhones for events and use NFC to redeem those tickets at the event.

The above are just some of the patents Apple have applied for in direct relation to NFC in their devices and services. Apple must be planning to be a key player in the NFC payments industry and has to act quickly if it wishes to dominate this industry as it has in music sales and smartphones.

Latest Apple iPhone 5 and iPad 3 manufacturer news gives us some clues.

As we reported just Friday, suppliers are gearing up to start producing the iPhone 5 in August. What we didn’t expect to hear is that the six month old iPad 2 is rumored to be replaced with a newer iPad 3, but this also is due to start being manufactured in August. This cuts out a full 50% of the iPad 2′s life cycle which hits ROI for Apple, which leads to the question: why would Apple only allow one of their products to live out half of its normal life span for sales? An answer could be that they plan to release a set of products that are needed to own an industry. If Apple can get to market with NFC iphones and NFC iPads before any other manufacturer of luxury gadget has time to react, they could buy themselves between a year and two years for other competitors to react and dominate the marketplace as they did with the original iPad. Aside from simply selling iPhones and iPads this could allow Apple to set itself up as a TSM (trusted service manager), and also take a massive chunk of the mobile payments market. If this particular rumor does ring true, come September this will be a blow for the likes of PayPal, Google and Amazon who are all working on their own services.

Even if Apple intended to hold off on launching an NFC-enabled iPhone 5 and iPad 3, NFC competition may have forced its hand

We have mentioned this aspect of why Apple may just launch an NFC-enabled iPhone 5 and iPad 3 earlier than it had first intended throughout our reports on the issue. We are sure that misinformation has been spread both in support or negating the likelihood of an NFC iPhone 5 or iPad 3. What we do know as fact though is that the competition is mounting and quickly. Google has announced its Google Wallet and Google Offer products which are due for a national rollout in the fall here in the United States. PayPal has started to show its merchant aspirations for NFC technology allowing the company to transition from the virtual world into the real world. We have seen payWave and PayPass from Visa and MasterCard who are undisputedly the two heavy hitting credit card companies. Mobile carriers are forming anti-competitive joint ventures in the U.S. and Europe which are built around keeping competition out. We are not sure what Amazon has in mind just yet but have heard they are working on their own NFC solutions. The market is heating up, and if Apple wants to be the key player that is suggested in its patents it needs to get into the market soon and the iPhone 5 and iPad 3 are perfect to do so.

Apple may have already selected a provider for NFC secure elements and chip technology for the iPhone 5 and iPad 3

Qualcomm announces NFC secure element chip which Apple is rumored to be using (see above NY Times). Qualcomm announced back in February that it had partnered with Inside Secure to build NFC handsets using a MicroRead multi-standard NFC chip. It is likely Apple would have chosen this semiconductor over NXP’s offering because it features “battery-off” and low-power card detection modes to extend battery life for NFC-enabled phones. This rumors makes sense, Apple are known to be obsessed with battery life and having a chipset that can work with SIM, SE or SD card would allow Apple the flexibility it may need for different carriers and markets for its secure element options.

Apple refresh cycles suggest something is happening that could suggest the launch of the NFC iPhone 5 and NFC iPad3

New iPhones are normally released in June or July. New iOS operating systems follow the same schedule, but not this year. Apple announced iOS 5 at WWDC in June but said it would not be released until fall. iPhone’s have been completely moved to a rumored September release date and now we are hearing there is a new iPad 3 coming a full six months ahead of schedule. Something big is happening. When we look at what is happening in mobile technology at this time that could inspire such a shift in priorities for Apple and could represent such an opportunity, we are left with two advancements that are slated to take off this year. One is LTE, the 4G data rate, but the networks have not deployed them sufficiently over their networks so Apple would change its refresh cycle  to accommodate the technology. Apple is also known to wait until networks have a large footprint before they support such upgrades and the smartphones that are capable of 4G data thus far are said to have terrible battery life. Better chips are said to arrive in November but that could be too late for the next iteration of Apple’s smartphone, the iPhone 5.

The other technology coming this year is NFC. The chips are available and some have great power management. Competitors have announced their plans in this marketplace and Apple has filed more patents that we can keep count of with regards to NFC in their devices. Media channels are split on whether the new iPhone 5 and iPad 3 will feature NFC capabilities. Whereas no one will know for sure until September, we at NFC Rumors will be shocked if Apple doesn’t launch an NFC iPhone 5 and will be pleasantly surprised if Apple launches an NFC iPad 3 in September. We’ve now stuck our toe in the water. So now you have your say in the comments below – do you think we will see an NFC iPhone 5 or an NFC iPad 3 this September?