Friday, April 6, 2012

NFC Has Hit the "Trough of Disillusionment"

Google Wallet co-founding engineer Rob von Behren has left Google for payments startup Square. It isn't unusual for engineering personnel to change jobs. He had been working on Google Wallet since 2009. 


But there will now be suggestions of two types. The first is that Google Wallet "is in trouble." The other suggestion might be that near field communications "is in trouble." One might argue that neither really is the case. 


Rarely does an important new technology succeed the first time, or succeed right away. Apple's success with the iPad follows more than a decade of manufacturers trying to create a big new market for tablets, with almost no success. The Apple iPod is more nearly an example of an innovation that breaks the rule and becomes a nearly-instant success. 


But that's unusual. Almost always, a foundational technological approach takes time to show its significance. For that reason, many have been warning that it was "inevitable" that near field communications would pass the peak of its hype cycle and enter a period of disillusionment, which one might argue now is happening. 


That does not mean NFC will "fail," merely that it could be an important technology that ultimately will prove to be a mass market success. But that could take some time. Just how much time is not so obvious. 


But most important new technologies, especially when they involve change in a big and well-established ecosystem, take some time to mature. In part, that can happen because a value chain is complicated enough that lots of different contributors must be put into place to offer a full and robust solution. 


But in technology, the "best" solution, technologically, does not always "win." The perhaps classic examples are VHS and Betamax standards for videocassette recorders. Betamax was "better" in technology terms such as image quality. But VHS was "good enough" to satisfy market demand. 


If we assume NFC now has entered a period where the hype has crested, that might only mean that the typical hard work to construct a workable ecosystem can now proceed. That might also occur simultaneously with market success for other approaches that are good enough right now to win in the market. 


What cannot be predicted is whether the good enough solutions will preclude the "better" solutions, or whether it will simply take NFC the typical time most important technologies require to become mass market realities. 

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