Amid much fanfare, Apple finally unveiled its latest product, the iPhone 5, at a press event in San Francisco. The device – which will hit shelves in 22 countries later this month - sports a host of new hardware and software features, including a larger, four-inch display, and smaller charger, however its ability to support NFC is missing. There was much speculation that the mobile phone giant would incorporate the technology, however the omission indicates that it will opt for a different route in to the payments market.
“The news that Apple has chosen not to make NFC technology a feature on the new iPhone 5 does not come as a huge surprise and I think they are right to prioritise other technology at the current time,” said Keith Brown, MD of paythru, following the launch. “True mobile payments need to be available at any time, from any location, and remove the need for the customer to be physically present at the point of sale. NFC is one of those technologies that has been developed for mobile payments without solving an existing problem – it’s like making a medicine and then trying to find a disease that it will cure.”
Brown said that consumers currently have little need for NFC as they are very comfortable using traditional payment methods such as Chip & PIN and swipe cards.
“What is more interesting though is the launch of the new Passbook service using QR codes for purchases and storing loyalty cards and coupons on the same device, since the ability to scan barcodes that are displayed on the phone’s screen is already widespread and this could really take the industry forward,” he added. “Using QR codes allows for much more available and secure payments. Apple is biding its time at the moment with NFC, but I think they will be the winners in the longrun as they are obviously looking at solutions in the meantime such as Passbook and the acquisition of biometric security, that will make mobile payments ubiquitous and secure.”
Apple’s marketing chief, Phil Schiller, says the company has “updated every aspect” of the smartphone as it seeks to regain its position as the world’s top smartphone manufacturer. However, the smartphone market is now more competitive than ever, with firms including HTC, Nokia and Motorola Mobility all bringing out devices aimed at rivalling Apple's device. Regardless of the lukewarm reception it received from some analysts, who claim it is not as revolutionary as initially expected, and despite the lack of NFC support, the device is still likely to achieve record sales.
Apple still has the user base to be a major force in the mobile payments market and thus its next move will be observed with much interest.