This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

Mark Hung

Research Director

NFC: The Path from Hope to Reality

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Key Issues

• What are the current roadblocks?

• What are the key markers to watch?

• How are the industry players positioned?

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Roadblock #1

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Roadblock #2 – Fixation on Payments

• The Triad – Banks, Carriers, Platform Providers

• Infrastructure – Merchants

• Year of the Wallet

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N = 3,032

Wallet ProviderInterest vs. Perception

NFC Payment – Positive Developments

• Pew Internet Project- 10%: used mobile phone to make charitable donation by

texting

- 33%: used smartphone to do online banking

- 46%: purchased an app

- 65%: “By 2020, most people will have embraced and fully adopted the use of smart-device swiping for purchases they make, nearly eliminating the need for cash or credit cards.”

• Starbucks payment app- 26 million payments processed in first 11 months

- 15 million payments processed in following 4 months

• EMV: Visa and MasterCard

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Roadblock #3 – Where’s the Killer App?

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Key Issues

• What are the current roadblocks?

• What are the key markers to watch?

• How are the industry players positioned?

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10

DOOH!

Marker #1: Mobile MarketingDOOH

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• Attract

• Engage

• Educate

• Purchase

Marker #1: Mobile MarketingQR Code – The Gateway Drug

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Marker #2: Device Pairing

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Marker #3: Authentication

• Physical access- Residential: Yale/Assa

Abloy

- Commercial: HID Global

- Hospitality: Openways

• Computing: Intel

• Online: Intel and MasterCard

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Marker #4: Transportation

• Public Transit- Bay Area: BART

- New York: MTA

- U.S.: Salt Lake City, Philadelphia, Boston

- Asia: Japan, Singapore, China

• Parking- San Francisco’s metered street-side parking

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Key Issues

• What are the current roadblocks?

• What are the key markers to watch?

• How are the industry players positioned?

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The Path to Reality

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Enable the Technologyfor Mass Adoption

Enable the Technology for Mass Adoption Semiconductor Vendors

• Current cost too high: total system implementation cost is higher than the most common wireless connectivity functions…combined

• Recent Developments- NXP’s new antenna optimizing chip

- Broadcom’s 40nm chip

- TI’s 5-in-1 combo

- Kovio’s printed silicon tag

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The Path to Reality

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Increase the Attach Rate of NFC

Enable the Technologyfor Mass Adoption

Increase the Attach Rate of NFC Handset OEMs

• Platforms

• Hero devices- Galaxy S III

- Galaxy Nexus

- HTC One X

- Nokia PureView 808

- Blackberry Bold

• Continue on the current path, and start driving it to mid-range phones

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The Path to Reality

21

Increase the Attach Rate of NFC

Enable the Technologyfor Mass Adoption

Expand NFC toOther Platforms

Expand NFC to Other Platforms Computing and Consumer Electronics

• The sum is greater than the parts

• Recent Developments- Tablet: B&N Nook, Sharp, Samsung Galaxy Note

- PC: Ultrabook

- TV: MobiSocial, Nokia Play

- Set-top Box and Wireless Routers

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The Path to Reality

23

Increase the Attach Rate of NFC

Enable the Technologyfor Mass Adoption

Expand NFC toOther Platforms

Create a Platform-Independent Solution

Create a Platform Independent Solution OS Providers

• Interoperability is key

• Current Issues- Inability to share

- Tag confusion

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Tag Confusion

• NFC Forum Type 1- Topaz

• NFC Forum Type 2- Mifare Ultralight- NTAG 203

• NFC Forum Type 3- Felica RCS 965 NFC

• NFC Forum Type 4- Mifare DESfire EV1 4k

• Type 2 Compatible- Mifare Classic 1k- Mifare Classic 4k

• NFC-V / ISO 15693- NXP SLI

• Web link (smart poster)- NTAG 203

• Web link (URI)- Mifare Ultralight

• Phone call (URI)- Mifare Ultralight

• SMS (smart poster)- Mifare Ultralight

• E-mail (URI)- Mifare Ultralight

• vCard / Business Card- NTAG 203

• Text RTD- Mifare Ultralight

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The Path to Reality

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The Path Does NOT Include…

• Service providers (e.g., banks)

• Carriers

• Merchants

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NFC Market Adoption

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NFC Volume

Where Do We Go from Here?

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“And no, we don’t know where it will lead. We just know there’s something much bigger than any of us here.”

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This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

Mark Hung

Research Director

NFC: The Path from Hope to Reality