Near Field Communication (NFC) Market Analysis By Product (Auxiliary, Non-auxiliary), By Application (Payment, Transportation, Booking, Data Sharing, Service, Access Control, Healthcare) And Segment Forecasts To 2020

Published: November 2015 | Report Code: 978-1-68038-261-7 | Report Format: Electronic (PDF)

Industry Insights

The global Near Field Communication (NFC) market is poised for substantial growth over the forecast period. Technological proliferation and increased use of smartphones and tablet PCs are expected to drive the demand for this technology over the next six years. The escalating need for quick and safe financial transactions along with the flexibility and ease of use it offers is anticipated to fuel near field communication industry growth.

NFC is a short-range wireless communication technology for two devices that are in contact or momentarily held together. It is one step ahead of the RFID technology and is approved globally by the ISO/IEC standards as an open platform technology. Moreover, GSMA and the NFC forum are developing a benchmark global standardization, which is anticipated to have a positive impact on the demand.

The increasing availability of low-priced smartphones along with the cost-effectiveness associated with them has fuelled the demand for this technology. It provides significant opportunities to the direct mail marketing sector. Marketing executives can use this technology in delivering content and information through an embedded chip, which allows a wireless connection as a user touches a smartphone or a mobile device or brings the device in close proximity of an NFC tag.

Several devices and equipment such as laptops, tablets, cars, vending machines, and other consumer electronic devices such as cookers, washing machines, televisions, and other entertainment systems are integrated with this technology.

M-commerce, where financial transactions are done using mobile phones, is expected to gain prominence over the forecast period. It provides essential security features making it a preferable technology over others for most of the financial activities. However, lack of consumer awareness, high development cost, and poor infrastructure are anticipated to pose a challenge to near field communication market growth.

Additionally, the technology enables ten times faster data transfer speeds, which is expected to drive industry growth. Transformation in the transaction processes from conventional process offers wide avenues for industry growth. Social media engagement applications showcase the potential to drive the demand for such advanced technology.

Product Insights

The industry is broadly classified into auxiliary and non-auxiliary products. Auxiliary products comprise NFC-enabled MicroSD cards, SIM cards, and covers, whereas non-auxiliary category includes tags, IC/chips, and readers. Smartphones normally are equipped with integrated chips that facilitate data transfer over short distances.

NFC tags have stickers or wristbands that contain microchips, which store data and can be transferred to another device such as smartphones. The tags can store different data types such as a telephone number or a URL.

Such advanced MicroSD cards, which can be inserted in the handset, are maintained by an entity that controls the MicroSD card securing the transaction channels. SIM card-based devices offer better security and help reduce fraudulent activates and, thus, are increasingly adopted by merchants, and retailers account services across their point of sale terminals or cash registers.

Application Insights

NFC market technology is anticipated to be used extensively in making secure financial transactions and payments in future. Moreover, other applications include data sharing, transportation, access control, booking, healthcare, and service.

The proliferation of smartphones has spurred the mobile payment demand. Innovative payment options use such advanced technologies that enable customers to make payments by a simple gesture of an NFC-enabled credit card or smartphone at the point of sale (POS) terminal.

Moreover, the technology is extensively used in transit applications to deliver new capabilities and in processing payments along with system entry and exits. Transit ticketing is anticipated to provide a flawless process that supports purchasing, planning trips, view next vehicle arrival information, and account top-ups.

Regional Insights

Developed infrastructure facilities and increased proliferation of smartphones have spurred the Asia Pacific near field communication market growth. Upcoming government initiatives in countries such as Japan and South Korea in support of such advanced technology are expected to drive industry growth in this region. The emergence of mobile wallets in developed economies such as the U.S. and Europe is expected to drive the regional industry growth.

International payment systems such as VISA and MasterCard are working towards the installation of NFC-enabled checkouts counters across coffee chains, restaurants, retail outlets, and petrol stations in Korea and other nations. For instance, the Korean Coffee Chain uses the technology to provide loyalty coupons to its regular customers, thus improving on the customer experience build-up.

Competitive Market Share Insights

Major industry participants include Broadcom, Gemalto, Infineon Technologies, Inside Secure, Nexperts, NXP Semiconductors, Renesas, Samsung Electronics, Sony Corporation, STMicroelectronics, and Texas Instruments. The near field communication market share is highly competitive and is driven by technological and product innovation.

Manufacturers take up mergers and acquisitions as their key growth strategy to acquire a major share in the global market. In 2014, Inside Secure, a French embedded security solutions company, acquired Metaforic, based in the U.S., aimed to gain access and expertise in technologies that support secured mobile payment systems.

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