Isis announces NFC phone allies for the looming wallet wars

Isis announces HTC, LG, Motorola Mobility, RIM, Samsung Mobile, Sony Ericsson and DeviceFidelity as NFC phone allies for the looming wallet wars

Isis today announced that HTC, LG, Motorola Mobility, RIM, Samsung Mobile, Sony Ericsson and DeviceFidelity have committed to supporting the upcoming mobile wallet provider with NFC phones. For a service that won’t even open the doors until as late as the middle of next year, Isis is certainly making a lot of noise about its as yet non-existent service. We very much view this announcement as an obvious non-news statement to detract attention from Google Wallet. Of course, these OEM handset manufacturers are going to produce NFC phones that use SIM based NFC. They wouldn’t want to cut out the ability to get on to Verizon, AT&T and T-Mobile USA’s networks. However, there are a few interesting aspects of this news that we will go into later in this post.

The official line from Isis:

“Isis’ technology standards provide the direction and certainty needed for the development and deployment of NFC devices and the mobile commerce ecosystem,” said Scott Mulloy, Chief Technology Officer at Isis. “Working together with the device makers and our founding mobile carriers, Isis can provide the consumer choice and scale necessary for widespread adoption of mobile commerce.”

Quotes from the OEM NFC phone manufacturers that Isis has lined up for this announcement

For Isis to make this announcement and add credence to it, it needed to have buy-in from OEM manufacturers and had them all supply quotes. So here they are:

“Today’s announcement signals the growing acceptance of NFC technology by some of the world’s leading device makers,” said Kouji Kodera, Chief Product Officer at HTC Corporation. “At HTC, we see tremendous opportunities for consumers and merchants as we move beyond traditional payments to a future of NFC-enabled mobile commerce.”

“NFC technology on LG devices will provide consumers with an all-in-one mobile experience that delivers convenience without comprising security or piece of mind,” said Jeff Hwang, President of LG Mobile Phones. “Creating the ideal mobile wallet, LG NFC enabled devices will help change the way consumers shop, pay and save.”

“NFC is the future of mobile payments and will ensure that transactions are done securely from mobile devices,” said Christy Wyatt, Corporate Vice President of Software and Services Product Management at Motorola Mobility. “Through working with Isis as well as the broader Android ecosystem, we look forward to providing consumers with NFC-enabled handsets that make mobile commerce a reality.”

“RIM is working in close collaboration with Isis to help make the concept of mobile commerce a reality,” said Andrew Bocking, Vice President of BlackBerry Software at Research In Motion. “The new line-up of BlackBerry® 7 smartphones include various models that are NFC-enabled and demonstrates RIM’s commitment to enabling NFC-based experiences on BlackBerry.”

“The key to widespread adoption of mobile commerce will be the broad availability of NFC-enabled handsets,” said Dale Sohn, President of Samsung Telecommunications America (Samsung Mobile). “Samsung Mobile will be working with Isis and the mobile carriers to ensure NFC-enabled handsets are widely available to consumers.”

“NFC offers consumers the ability to broaden their communication experience beyond the phone, and common standards and best practices are key to a secure and convenient mobile commerce experience. Sony Ericsson is poised to be part of this movement and to drive the development of new, exciting and creative experiences to deliver the most entertaining smartphones,” said Jan Uddenfeldt, Chief Technology Officer at Sony Ericsson.

“DeviceFidelity is proud to be among those chosen by Isis to power its NFC mobile wallet offering,” said Deepak Jain, Chief Executive Officer and Co-Founder of DeviceFidelity. “Working side-by-side with Isis and leading handset makers, we aim to provide the scale and choice of consumer preferred devices to ignite the industry and assure continual mass adoption of mobile commerce.”

As you can see, everyone is very proud and very happy to be able to sell NFC phones on the big three mobile network operators’ networks. We actually think they should be happy with the ability to do so. Although these particular brands have always been able to sell smartphones on those networks. The only difference now is that Isis is now the master who can either have a phone on or off the network dependent on Isis’ needs and not that of consumer demand and network concerns as it was in the past.

Isis and open choice in NFC mobile wallets

Isis stated, “Isis is committed to developing a comprehensive, open mobile commerce platform that aligns the interests of all key stakeholders and provides consumers with freedom of choice and security.”

That’s great news for consumers, who will now obviously be able to use Google Wallet and any other third party NFC mobile wallet through Isis, won’t they? Perhaps not. Isis are currently ensuring that they are the only game in town that acts as the provisioning service and trusted service manager for Verizon, AT&T and T-Mobile’s networks.

This effectively makes Isis a monopoly. As much as they call Isis an open mobile commerce platform it doesn’t necessarily make it true. Any mobile wallet or Secure Element app that wants to work on Isis controlled networks will have to use Isis as the provisioning agent and at least partially as the trusted service manager. Companies who want to have secured apps on the carrier supplied SIM cards will have to pay leasing fees to individual mobile network operators. That doesn’t sound very open to us. The term “open” is used extensively these days, and has its roots in open source meaning free, open, all inclusive. The model Isis and other NFC payment joint ventures are setting up are anything but open. The fees they charge and the information they will have access to about their consumers is unprecedented.

Joint ventures like Isis will undoubtedly pass fees back to the end consumer and add costs to doing business. If Isis is the monopoly, businesses, banks and card issuers will have very little choice but to comply with the Isis terms of engagement. That is also true for the NFC manufactures named above. Consumers who will have then disclosed personal shopping data including location, products purchased and purchasing frequency to Isis can expect to be marketed at for those same types of products and services. Where as this is the model that has emerged in NFC payments, usually this process is divied up between multiple companies so no one group has all the information. What makes Isis different is that it impedes competition and acts as the sole component in control of three of America’s four main carriers.

A telling sign of Isis’ plans is the inclusion of DeviceFidelity in their list. DeviceFidelity produces NFC microSD products that will enable non-NFC phones to conduct NFC payments. This shows us that Isis intends to enable phones already in the marketplace with NFC capabilities, which is a great move for people who are bound in to a contract. DeviceFidelity also manufactures an iPhone case that gives the iPhone NFC capabilities and as it is the number one selling smartphone in the US on Verizon and AT&T this adds further speculation that Apple will not support NFC in its upcoming iPhone 5.

Another interesting aspect of this announcement is the inclusion of Motorola Mobility. Google acquired Motorola just weeks ago and we found it odd to find their name listed. Of course, for profitability Google would want Motorola to be able to sell phones on the network. But considering that Jamee Johnson of Isis was slamming Google Wallet just this last week, we find it odd to see a Google owned company supporting the joint venture. That leads us to speculate whether Google may be doing deals with Isis behind closed doors. If that is the case it represents a travesty for consumer rights and the free market in the United States. Google is having its own troubles at the moment which you can see in our exclusive last post.

Make no mistake, there is a Wizard of Oz element to these announcements, and we advise you to look behind the curtain before you buy into Isis. From the NFC Rumors perspective, we know we are hard on Isis because we feel they intend on degrading consumers’ rights and constricting open business opportunities for entrepreneurs and developers everywhere. If Isis and other joint ventures around the world redefine themselves and their models to be true open ecosystems we will be the first news outlet to congratulate them and promote their service as we do for hundreds of other companies in the NFC ecosystem because we love to support the NFC community. However, as it stands today we feel Isis represents a monopoly which only benefits Isis and so we will continue to educate consumers.

If you want to read more about Isis, check out a post we let loose this weekend and feel free to share.