Apple iPhone 5: Report Says NFC Unlikely As Release Date Nears; How Will It Affect Company?

  @KukilBora on August 29 2012 6:36 AM

With the widely believed Sept. 12 unveiling and Sept. 21 release date for the next generation Apple iPhone, aka "iPhone 5," approaching fast, the tech world has been flooded with a number of reports over the last few months, concerning the look and new features of the upcoming flagship smartphone from the Cupertino tech giant.

As of now, one of the much talked-about and likely features of iPhone 5 has been the Near Field Communication (NFC) technology that would turn the new iPhone into a wallet. With mobile payment being a hot topic in recent years and Apple revealing the iOS 6 feature "Passbook" during the WWDC 2012, the possibility of including the feature in the upcoming version of the iPhone was very much increased.

On top of this, a report surfaced on Chinese website Apple.pro Monday with claimed photos of the front assembly of the next gen iPhone. The photos showed a new component never seen before in the iPhone, which was speculated to be a near field communication device.

"At first glance the images appear to be similar to those of a semi-assembled front panel published earlier this month, however closer inspection reveals more parts are present, including what could be a near field communication chip located next to the unit's front-facing camera," Apple Insider reported.

The report cited Japanese Apple blog MacOtakara, which said that the square-sized component, covered by EMI shielding, was similar to the dimensions of currently available NFC packages, such as NXP's 5 millimeter-by-5 millimeter solution.

So, considering all these information and leaks at a time when the next iPhone is just weeks away, it does sound quite reasonable to believe that mobile payment would indeed be possible via NFC in the new iPhone.

Well, folks at AnandTech don't think so. They said in one of their reports Monday that the new iPhone's backside ruled out the possibility of NFC within the device. According to the report, inclusion of NFC is very unlikely because of the mostly metal backplate of the next iPhone.

"Given the primarily metal backside of the new iPhone, it's highly unlikely that NFC is in the cards for this generation. In fact, given the very little space at top and bottom dedicated to those glass RF windows, you can almost entirely rule it out," the report explained.

As CNET has pointed out, NFC antennas are big inductors and need sufficient and dense space, "more than would be possible if it were placed at the tight top or bottom of the phone's assembly."

"With an NFC antenna at the extreme top or bottom, alignment with non-iPhones (for example, payment tokens or reader tags) becomes a much more confusing task, and that doesn't seem like the Apple-like level of polish everyone is waiting for to drive NFC adoption," said the AnandTech report.

As far as the mystery component, seen on the photos, is concerned, AnandTech speculated it to be the touch and display controller meant for the new iPhone's thinner in-cell touchscreen.

The report also challenged the inclusion of "Passbook" in iOS 6 as the most significant piece of evidence for Apple incorporating NFC in the iPhone 5. According to it, "Passbook" in iOS 6 isn't necessarily an indication of NFC as "Apple hasn't disclosed at all whether it would favor NFC or a Bluetooth LE (low-energy) or even QR code based payment token through that gateway."

In addition, AnandTech's take on NFC as a feature of the next iPhone has been backed up by Jim Dalrymple of The Loop with his identical "Yep" response.

How Omitting NFC From iPhone 5 Can Affect Apple

According to ZDNet's Jason D. O'Grady, "Apple would be foolish" if it doesn't include NFC in the next iPhone. This is because "NFC is the key to mobile payments and the smartphone can (and will) replace the wallet. It's just a matter of time," he added.

O'Grady provided some key data that highlighted the growth in mobile payments. Here're a few:

  • Worldwide mobile payments will surpass $170 billion in 2012 (up 61.9 percent over 2011): Gartner
  • Mobile payment are expected to exceed $600 billion by 2016: Gartner
  • Google Wallet is now cloud-based and can be used with multiple credit and debit cards
  • PayPal is now accepted at 16 national merchants, including over 3,000 Home Depot, Abercrombie & Fitch, Barnes & Noble, and Office Depot locations

Although NFC is yet to become a mainstream, O'Grady believed that Apple was capable of doing that. The company has more than 400 million active credit card accounts in file, which it can use to the fullest with the iPhone.

Given that the mobile payment market is growing fast and Apple has at least six patents related to mobile payments, shunning such a profitable business would be insensible for a company like Apple, which has "250 million iPhones in people's pockets and 400 million credit cards on file."

"Omitting NFC hardware in the iPhone 5 could be fatal mistake for Apple," said O'Grady. "It would set it back another year behind Android devices that already contain NFC hardware and severely cripple Apple's promising PassBook app in iOS 6."

According to Andrew Till, senior VP and CTO at Symphony Teleca, a Palo Alto-based software and consulting firm, iPhone 5 will become "the new wallet" thanks to NFC.  He said that the iPhone-maker "is working to lock customer in and manage the way consumers buy."

"The iPhone 5 will prove to be an important announcement for the entire tech community but most especially for Apple's competitors as there's a chance that NFC capabilities will be one of the features announced," Till wrote in an article published by Forbes.

"Once Apple enters the mobile payments race through NFC, it is undeniable that there will be noise heard around the world as competitors begin to hustle to keep up."

Other Rumored iPhone 5 Features

The next Apple iPhone is expected to come with a larger 4-inch screen with in-cell touch technology, uni-body design and a smaller 9-pin dock connector. The device is likely to run on iOS 6, which would be completely scalable to a larger 640 x 1136 display.

The iPhone 5 also highly rumored to be powered by a much-improved processor. Other much talked-about features include 4G LTE technology, Near Field Communication (NFC), 1GB RAM, improved Siri, liquidmetal casing, an 8 megapixel (or even higher) rear camera, a 2 megapixel front-facing camera for video chatting and a much-improved battery life.

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