Showing posts sorted by relevance for query nfc forecast. Sort by date Show all posts
Showing posts sorted by relevance for query nfc forecast. Sort by date Show all posts

Wednesday, December 5, 2012

NFC Pessimism Grows, and Might be a Good Thing

Juniper Research has revised its forecasts for the global near field communications market, significantly scaling back its growth estimates for the North American and Western European markets. In some ways, that might be considered a "good" thing, to the extent that it follows a common pattern of technology adoption.

What is "good" about deflated hopes is that such periods seem "always" to happen, and are just a milestone on the way to eventual adoption on a fairly wide scale. So the argument is that dashed initial hopes mean the market is moving in the way one should expect: high hopes, disillusionment, and finally adoption.
The most significant change to the Juniper Research forecast is the amount of transaction activity NFC devices will drive, as the new forecast reduced the number of NFC devices in use only slightly.

By 2017, global NFC retail transaction values are now expected to reach $110 billion in 2017, significantly below the $180 billion previously forecast. 


Such revisions are not unusual in the predictions business, especially not for a brand new market that depends on many changes in the ecosystem.

Apple’s decision to omit an NFC chipset from the iPhone 5 has reduced retailer and brand confidence in the technology, leading to reduced point of sale) rollouts, for example.
This in turn will lead to lower NFC visibility amongst consumers and fewer opportunities to make payments, threatening a cycle of “NFC indifference” in the short term, Juniper Research believes.

“While many vendors have introduced NFC-enabled smartphones, Apple’s decision is a significant blow for the technology, particularly given its previous successes in educating the wider public about new mobile services” says Dr. Windsor Holden, author of the study.

The report found that Apple’s move would impact most dramatically on markets in North America and Western Europe, where transaction values would exhibit a “two year lag” on previous forecasts as retailers delay POS investments.

Conversely, retail transactions in NFC’s heartland in Japan and Korea are likely to experience little or no impact from the Apple decision.

None of that is terribly surprising. Though the 2011 KPMG Mobile Payments Outlook, based on a survey of nearly 1,000 executives primarily in the financial services, technology, telecommunications, and retail industries globally found that 83 percent of the respondents believe that mobile payments will be mainstream by 2015, even the moset astute industry observers tend to overestimate early adoption of a major new technology, while underestimating long term impact. 




Analysts at Gartner, for example, use a model of how expectations for significant new technologies running in a predictable cycle. What the cycle suggests is that expectations nearly always (always, according to the model) run ahead of marketplace acceptance.

What the Gartner hype cycle suggests is that expectations for mobile payments using near field communications are at a point where we can expect five to 10 years to elapse until NFC actually begins to make serious inroads as an adopted mainstream technology. The emphasis probably is important to note: “begins.”

In fact, Gartner's Hype Cycle now expects it will take five to 10 years before NFC is in widespread and mainstream use. Gartner's latest expectation likewise is that cloud computing and machine-to-machine applications will not be mainstream for another five to 10 years as well.

But new technologies historically take some time to reach 10 percent, then 50 percent, then virtually ubiquitous adoption. To be sure, there has been a tendency for new technologies based on digital and electronic technology to be adopted faster. But a decade period to reach perhaps 10 to 20 percent adoption is hardly unusual.

That is not much of an issue for point solutions like computers that can be used without lots of additional change in infrastructure. That is not true for highly-complex ecosystems such as payments, though.


ATM card adoption provides one example, where "decades" is a reasonable way of describing adoption of some new technologies, even those that arguably are quite useful.

Debit cards provide another example. It can take two decades for adoption to reach half of U.S. households, for example.

If Gartner analysts are right about the near field communications "hype cycle," we should continue to see "disillusionment" expressed about near term prospects for NFC. The reason is that Gartner now sees NFC at the "top" of its hype cycle, the point at which overly-optimistic projections face the reality of an extended period of development, before something "useful" actually emerges.

Internet TV, NFC payment and private cloud computing all are at what Garner calls the "Peak of Inflated Expectations," which is always followed by a period where the hype is viewed as outrunning the actual market. That suggests NFC soon will enter a phase where expectations are more measured.


Tuesday, June 10, 2014

NFC Adoption Forecast Slow in North America, Western Europe, Next 2 Years

At least so far, near field communications (NFC) has not propelled the mobile payments business as fast as some had predicted. And Juniper Research has now scaled back its forecasts for NFC adoption in the North American and Western European markets, though not the South Korean and Japan forecasts.

To be sure, skepticism about NFC has been growing for years, despite some thinking that NFC and mobile payments would hit an inflection point in 2013. In fact, some might argue Juniper Research made the NFC transaction revenues reduction in 2013.

On the other hand, neither should near term sluggishness in adoption come as a surprise.

Even popular consumer innovations can take a decade or more to reach 10 percent adoption, when the underlying ecosystem is complex, and has to be built almost from scratch. Use of automated teller machine cards and debit cards provide an example.

As useful as those innovations are, it took a decade for each to reach 10 percent adoption by the public. NFC adoption arguably will be tougher as debit and ATM cards required consumers only to change behavior and use new plastic cards. NFC requires replacing merchant cash registers and requires users to buy NFC-capable smartphones.

Adoption of ATM and debit cards cost consumers virtually nothing, or very little, in terms of transaction costs.

Also, one might argue the value proposition for use of ATM cards and debit cards was easier to understand. Debit cards replaced checks and check charges. ATM cards allowed users to get cash, or make deposits, outside of normal banking hours.

Paying by phone might not offer so much value over using a debit card.

While the Juniper Research report finds that by 2017 the proportion of NFC-enabled smartphones will be only marginally below previous estimates, global NFC retail transaction values are now expected to reach $110 billion in 2017, significantly below the $180 billion previously forecast.

Apple’s decision to omit an NFC chipset from the iPhone 5 has reduced retailer and brand confidence in the technology, leading to reduced POS (Point of Sale) rollouts and fewer NFC campaigns.

In turn, this will lead to lower NFC visibility and adoption in the near term, at least in the North American and Western European markets, creating a “two year lag” on previous forecasts.

“While many vendors have introduced NFC-enabled smartphones, Apple’s decision is a significant blow for the technology, particularly given its previous successes in educating the wider public about new mobile services” said Dr. Windsor Holden, Juniper Research analyst. “Without their support, it will be even more difficult to persuade consumers – and retailers – to embrace what amounts to a wholly new means of payment.”

Conversely, retail transactions in NFC’s heartland in Japan and Korea are likely to experience little or no impact from the decision, Juniper Research forecasts.

Google Wallet and ISIS likewise have struggled to gain traction in the U.S. market, and both rely substantially on NFC.

Thursday, May 31, 2012

Will 25% of U.S. and Western Europeans be Paying with NFC by 2017?

Juniper Research projects that more than 25 percent  of U.S. and Western European mobile phone users will use their near field communications-enabled mobile phones to pay for goods in-store by 2017, compared with less than two percent in 2012. 


That might strike some observers as a bit aggressive, given the "glacial" progress Isis and Google Wallet seem to be making with their NFC mobile wallet efforts. And those two initiatives are not the only NFC-based efforts. Nor can anyone be sure other potentially-powerful efforts will not emerge.


Some might argue other marketing-related applications are likely to achieve that sort of usage, though. 


In other markets, Telefonica and consortia of Western European mobile service providers also are trying to get regulatory clearance to launch their own programs. Project Oscar in the United Kingdom, owned by Everything Everywhere, Telefónica UK (O2) and Vodafone UK, is among them.

Consortia in Germany, Sweden, Denmark and Hungary are working on platforms of their own.  In the Netherlands, Travik is seeking approval, while in Scandinavia “4T” is seeking to launch, as well.

In Singapore, the Singapore IDA is spearheading creation of a mobile payments system as well. The French “Cityzi” mobile payments venture likewise was created by mobile service providers, but with key participation by banks and retailers, according to Juniper Research.

Assuming most of those efforts actually launch in 2013, some will assume it is a bit of an optimistic forecast that a quarter of all smart phone users will be using NFC by 2017, a relatively quick three years later.
It is not, perhaps, impossible, but will strike many as unlikely. At least in the U.S. market, there is quite a bit of skepticism about both Isis and Google Wallet, and even some opinion that NFC will not emerge as the most-important enabler of mobile payments.
Mobile payments will reach $171 billion globally in 2012, a 62 percent  increase over last year's total of $105.9 billion, according to research firm Gartner Inc.

That increase corresponds with a 32 percent rise in mobile payment users expected this year. The number of users is expected to hit 212 million users, up from 160.5 million in 2011.

But Web or WAP access is expected to make up 88 percent of mobile payments in the U.S. market as late as 2016, when NFC usage is expected to increase, Gartner believes.

Monday, January 7, 2013

Why 2013 Won't be "Year of Mobile Payments"

Without in any way implying that mobile payments will fail, 2013 will not be, as pundits often are fond of proclaiming, be the "year of mobile payments." The reason is simply that mobile payments requires changing significant business processes throughout a complicate ecosystem, and those changes always take time. 

Consumer demand is not so much the problem. It's all the other changes that have to happen, ranging from replacing store terminals and software to creating a critical mass of end user devices and awareness, as well as providing a clear value proposition.  

At the same time, expectations have been "dampened" by the continuing slow uptake of near field communications. But none of that should be surprising,  in a historical sense. 

Juniper Research has revised its forecasts for the global near field communications market, significantly scaling back its growth estimates for the North American and Western European markets. In some ways, that might be considered a "good" thing, to the extent that it follows a common pattern of technology adoption.

The most significant change to the Juniper Research forecast is the amount of transaction activity NFC devices will drive, as the new forecast reduced the number of NFC devices in use only slightly.

By 2017, global NFC retail transaction values are now expected to reach $110 billion in 2017, significantly below the $180 billion previously forecast. 



Such revisions are not unusual in the predictions business, especially not for a brand new market that depends on many changes in the ecosystem. That tends to mean excessive enthusiasm early on, with an under-appreciation of what is going to change later.

What is "good" about deflated hopes is that such periods seem "always" to happen, and are just a milestone on the way to eventual adoption on a fairly wide scale. So the argument is that dashed initial hopes mean the market is moving in the way one should expect: high hopes, disillusionment, and finally adoption.


Such hype cycles might be viewed as a typical part of the technology adoption cycle for any important new technology.

New technologies historically take some time to reach 10 percent, then 50 percent, then virtually ubiquitous adoption. To be sure, there has been a tendency for new technologies based on digital and electronic technology to be adopted faster. But a decade period to reach perhaps 10 to 20 percent adoption is hardly unusual.

That is not much of an issue for point solutions like computers that can be used without lots of additional change in infrastructure. That is not true for highly-complex ecosystems such as payments, though.

ATM card adoption provides one example, where "decades" is a reasonable way of describing adoption of some new technologies, even those that arguably are quite useful. 


Debit cards provide another example. It can take two decades for adoption to reach half of U.S. households, for example. 






Thursday, December 30, 2010

Near Field Communications Forecast

Worldwide shipments of mobile phones with built-in near field communications capability will rise to 220.1 million units in 2014, up by a factor of four from 52.6 million in 2010.

In 2014, 13 percent of cell phones shipped will integrate NFC, up from 4.1 percent in 2010, according to iSuppli. All of that is expected to lay the foundation for wider use of NFC for a variety of mobile payments and commerce applications.

Nokia has said it will support NFC in all new smart phone models introduced in 2011 while Google has made NFC a standard feature of its Android 2.3 operating system.

Friday, November 4, 2011

Era of E-Commerce is Over

Forrester Research e-commerce forecast
John Donahoe, CEO of eBay, has said that the concept of e-commerce is dead and buried, since consumers really don’t care about where they buy, so long as they get the cheapest price. You can thank increasing use of mobile technology for that change.

Now consumers are walking into retail stores, and using their phones to identify better prices for goods they like, and will use either online or offline purchasing to get the price they want.


“Over the last 12-18 months we at eBay have changed our view on e-commerce,” he explained. “We’re now seeing a profound change in how consumers are behaving, and we’re going to see more changes in the next three years than we’re seen in the previous 20 in terms of shopping and payments." 

NFC handset forecast
"Mobile devices are blurring the lines between online and offline at a rate no one would have predicted.” eBay boss declares era of e-commerce is over

As for eBay’s strategy, Donahoe said the company is presenting itself as a retailer-agnostic platform. Price comparison applications on the site will show a broad range of suppliers, all displayed on a level playing field with the competition. eBay will simply process the sale.

Friday, June 29, 2012

Mobile Payments Will Reach $245 Billion by 2014

According to 2011 data from Ernst & Young, mobile payments are expected to reach $245 billion in transaction value by by 2014. The actual forecast transaction is probably not so important. 


Neither is the forecast number of mobile money users are expected to total 340 million, equivalent to about five percent  of global mobile subscribers.


Perhaps the more-important issue are the categories of mobile money Ernst & Young believe offer revenue potential for mobile service providers globally. 



Mobile payment technologies and scenarios1

 SMSNFCMobile internet
Payment typePerson-to-person
Person-to-business
Business-to-person
Person-to-business
Business-to-business
Person-to-person
Person-to-business
Use caseDomestic remittance
International remittance
Branchless banking
Contactless payments
Identification- and marketingrelated services
In-app payments
Mobile wallet transactions
CharacteristicsPayment services for the
unbanked and underbanked
High levels of cross-industry collaborationExtension of online payment services
ExamplesSalary payments (Roshan, Afghanistan)
Money transfer (M-PESA, Kenya; Obopay)
Transit payments (Mobile FeliCa, Japan)Mobile wallet (Paypal, Zong, Starbucks)
Payment providers and enablersStart-ups
Mobile operators
Money transfer companies
Handset manufacturers
Card issuers
Mobile operators
Handset manufacturers
Merchants
Start-ups
Web services players
Start-ups
Mobile operators
Merchants
Mobile operator participationHighMediumLow

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