Android NFC smartphones to rule 2012 onwards according to Informa

Android NFC smartphones to rule 2012 and onwards according to Informa Telecoms and Media report

630 million NFC handsets to drive transactions worth US$71 billion by 2015

NFC smartphone sales are set to sky rocket this next year to a dizzying 630 million handsets according to Informa Telecoms and Media’s latest report. The tipping point is here, the surge is coming, the equilibrium has been broken and we are racing towards critical mass. Everyone run for the hills, take no prisoners and do not ask what your mobile network operator can do for you, ask what you can do for your MNO. We could probably think of more cliche phrases to add, but the point is “research people, we know, we get it, it’s okay, chill out, sit down, have a bagel.” For those who don’t know, with the availability of NFC smartphones and choices in handsets is becoming an everyday event, and since Google released its Google Wallet, and Microsoft showed how they would support NFC in Windows 8, NFC has become a big topic across industries. Sure enough, hot off the heels of announcements like this we see the first trickles of the coming avalanche of analysts reports that predict everything from the world is doomed to we will all have NFC embedded in our ear lobes by this time next year. We guess it keeps them out of trouble and in many ways research analysts are our modern day prophets.

You have to view reports like these like 1950′s ads showing how we would all live in 2011. We note back in the fifties nobody predicted NFC and we are still waiting for our flying car. We see that the research industry will make 76% wrong predictions about NFC and out of those, 46.9% think NFC stands for bad words that mean “no chance.” Mobile network operators will insist it is all a conspiracy and it means “Now Fill Coffers.” Okay, we are done with our rant to amuse ourselves and they hopefully amused you too. Although we are having a bit of fun about the sheer amount of reports and predictions that swirl around mobile, and of late NFC we aren’t saying they are not useful. In fact, they are more in-depth than a best guess. Analysts pour over data, interview NFC key stake holders and painstakingly paint a picture of what could be if current patterns hold, and then attempt to aggregate that data out in yearly or quarterly forecasts. It’s a really detailed profession and in reality we quite admire those who do it well. This misnomer’s come about, because in case you haven’t noticed, us humans are fairly unpredictable and so is popular culture and news. It only takes one media blitz to change everything and we blame the oil industry for us not having flying cars.

Android to dominate NFC smartphones sales for the foreseeable future

Informa, as we informally we call them from this point on, predict that sales of NFC-enabled devices will accelerate from 2013 onwards. They also expect to see a large range of mobile NFC phones and an improved contactless POS infrastructure by 2013 also. Informa projects that by the time 2011 says goodbye and acquiesces to the oncoming 2012, there will have been 44 million NFC phones sold. They also predict that 2012 will see 630 million NFC phones sold in 2015, which will represent 40% of all new phones sold. Currently only 3.5% of phone sold are NFC phones.

“We expect a modest growth of the mobile NFC market for the next two years but this will change as many of the leading players introduce NFC-enabled handsets, spurred to enter the market by fear of Apple’s and Google’s ambitions in the sector. Google has already played its hand, overshadowing moves by carriers in its home territory, the US. Apple is still waiting in the wings, leaving everyone guessing,” comments Guillermo Escofet, Senior Analyst at Informa Telecoms & Media.

“We anticipate that Android will account for the largest number of NFC handset shipments from 2012 onwards and over 75% of NFC handsets are anticipated to be smartphones by 2015,” according to Shailendra Pandey, Senior Analyst at Informa Telecoms & Media.

NFC growth and adoption to be fueled by services

Although the brief of the report does not give actual percentages of what will drive NFC adoption, it does identify broad categories that include tagging/sharing, access controls, coupons, loyalty cards, information, ticketing and local payments. Notice that NFC payments in general are not making the list, and whereas in Western Europe and North America, we will have mobile networks that will exclude local payment companies from being able to operate in the global sense, this appears to not be the case.

“The total value of the transactions from mobile NFC payments is expected to grow from around US$2.4 billion in 2011 to over US$71 billion by 2015. Currently over 90% is generated in Asia Pacific (mostly Japan and South Korea) but this share will drop to around 40% by 2015 as Western Europe and North America start to see strong adoption of mobile NFC services,” adds Pandey.

“Not all NFC handsets shipped will be actively used for NFC services, as this will depend on the number and range of merchants with NFC-enabled POS terminals. Consequently, usage will be highest in markets where POS infrastructure is already widespread like Japan and South Korea or is expected to be rolled out quickly like major urban areas in Western Europe and North America,” concludes Pandey.

In developed countries NFC will quickly assert itself in all manner of products and services we will probably use everyday. However, in less developed markets there may simply not be the demand or services to support NFC to its full potential for main services. We wouldn’t be surprised if NFC tags are used regularly in countries that don’t benefit from payment networks and NFC POS systems in every store. We also think that person-to-person payments that uses NFC to transfer funds will be take off in developing countries and more developed economies alike.

Informa Telecoms and Media’s report is in line with what we can observe in the industry at this time. Whether the predictions of future growth and Android’s dominant NFC phone position stays that way through 2013, and potentially even after that, very much depends on competitors like Apple and Microsoft. What is for sure is that NFC phones will be commonplace by this time next year. If you would like to get your hands on the full report, which no doubt has more detailed information about NFC phone adoption and Android expected NFC phone lead, click here.