Sunday, 16 September 2012

Why is there no NFC in the latest iPhone? Because that isn't good for Apple.

Why is there no NFC in the latest iPhone? Because that isn't good for Apple.

 With all the hoopla that has been the week in Apple news (did you order your iPhone yet?) one of the biggest conversations has been about the omission of NFC and, for some reason, wireless charging (huh?).
 In an interview with AllThingsD, Apple VP Phil Schiller spoke what I think a lot of people are thinking when he said that it wasn't clear that NFC was the be all and end all for commerce. Apple tends to focus on usability and simplicity and NFC is neither yet - nor is there a clear need for it - so the iPhone went without.
 Now this lack of NFC certainly does not mean there is a lack of front facing commerce but, in Apple-style, they have not verbalized it yet. It does center around their Passbook service, it won't involve NFC and it has the potential to be very very valuable to the company. Here's my take.
 About a year ago Apple was granted a patent for a service called beacon that essentially is a location specific ad targeting system through passive location transmittal. How does this play with Passbook? Good question.
 Passbook is the EULA (end user license agreement) that enables Beacon. The basis for Passbook is context via location: your airline ticket doesn't appear until you arrive at the airport, your concert ticket becomes visible when you arrive at the stadium. How does that happen? How does the software know what to display where? Passive location. Your location is being transmitted and you've agreed to this by signing up to the Passbook service.
 So now that you've agreed to give up your location and it is being transmitted passively, what opportunities does this open up for Apple to monetize your location? For starters, does this rejuvenate (er, resuscitate) the Apple iAds product? It has been a marginal success at best and has disappeared from conversation for all but the very few (and very rich). All of a sudden the combination of Passbook and the permission you've given Apple to use your location makes iAds a powerful platform. But that's only a part of it.
 It has often been said that our smartphones have become our most personal devices. Think about what you tell it: It houses all your contacts and the frequency with which you reach out to them (via email, phone, text), it knows your favorite songs, movies, tv shows, and sees all your Facebook posts, tweets, LinkedIn updates because everything comes through your mobile device. It is the termination point for your digital life - and much of your IRL life as well. Apple knows you and knows what you like and hate. All that information - your personal analytics - combined with a constant beacon of location, time and day and your are about to be targeted with stuff you can't say no to. All through your device. All because of Passbook.
 The ability for Apple to reach out and sell to you is what they are interested in doing. There is nothing they do that doesn't disrupt industry and make piles of cash. This is another of those services. Commerce is not far behind but it will go through iTunes and the 400 million credit cards they have on file and not NFC. NFC doesn't make sense for Apple - they already have a way for you to pay with a single click. They would rather facilitate the sale and take their cut, that's what they do with virtual goods and that's what they will do with all goods, without doing anything other than asking us to sign up for Passbook.
 I could be wrong, but Passbook is not about making your life easier, it is about making it easier to sell you products and services that you are most likely to buy and facilitating that transaction. Apple knows how to make money and you can be sure they've been thinking this through since the beacon patent was filed in 2010.
 What do you think? Does Apple need to support NFC? Should Amazon watch out for what comes next?

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