Breakthrough in near field communications technology (NFC) can turn next-gen iPhone 5 into a digital wallet, so a customer will be able to use it with own iTunes account.
Near field communication, or NFC, provides simplified transactions, data exchange, and wireless connections between two devices situated not far from each other (usually it is a few centimeters).
Many corporations, such as Samsung , HTC, Nokia and RIM, have already had smartphones containing embedded NFC chips that can send encrypted data a short distance to a reader located.
Shoppers who have their credit card in their NFC smartphones can pay for purchases by waving their smartphones near or tapping them on the reader, instead of using the actual credit card.
The breakthrough was invented by NXP Semiconductors and Sony in 2002. After that NFC technology has been added in to a growing number of mobile handsets to enable mobile payments.
“As Android, Symbian, BlackBerry and Bada NFC supported functions, and Microsoft and plot to make Apple and Windows Phone iOS support NFC in 2012, the proportion of NFC-enabled smartphones will speedily from less than 10% to 50% over the next two to three years,“said publication.
The technology was first predicted to be in the iPhone 4S, but like 4G, the technology was not suit enough Apple’s standards.
Citing unnamed Taiwanese manufacturers, resources revealed that Apple, as well as other manufacturers, the new technology will be available in 2012 handsets, the iPhone 5.
DigiTimes predicts that the proportion of smartphones using NFC will rise from the current 10% to more than 50% in just two or three years and Apple is not going to miss out on this trend.
Apple Inc. has a huge database of iTunes accounts with about 200 million credit card details. It could provide Apple a competitive edge in developing an e-Wallet application for iOS.
In addition, using an NFC chip in the iPhone could add 450 million to $ 900 million cost of goods of Apple fiscal 2012, which could reduce the yucky margin Apple 0.4 to 0.7 percentage points.
Besides, there is also support from carriers around the world for SIM-based NFC technology with about 45 carriers giving it their backing to become the main NFC standard.
Analysts predict that Google will manage to lead Google Wallet to life. In 2014 it is expected that it will be supported by almost all the companies.
Google’s officials report that the Google Wallet has such merchant partners as Citi, MasterCard, Visa and First Data.
Rob von Behren, co-founder of Google Wallet said, “From Google’s perspective, the wallet is an appliance for users. It should be able to hold whatever a user would want in it.
It should work with all credit cards and coupons from third parties such as Groupon. The way that Google Wallet or any wallet will be successful is by being as open as possible and allowing as many different payments into the wallet.”
By the way, in September Google launched its Wallet mobile payment application on Sprint Nexus S 4G smartphones.