UK Markets open in 2 hrs 51 mins

NFC handset market led by Android in 2012

Alex De Angelis

The near-field communications (NFC) handset market has been forecast to increase at a compound annual growth rate (CAGR) of 58.5% through 2016, driven by the increasing adoption of smartphones, and the emergence of NFC-enabled handsets for transport ticketing.

The rapid proliferation of NFC in handsets will be driven by a number of factors, including the expanding availability of contactless readers and rising consumer awareness.

However, a key challenge during 2013 is to develop services and applications that consumers want, which will help to develop mass appeal and adoption of the technology.

The increasing adoption of smartphones has encouraged vendors to integrate NFC technology in their mobile handsets. Smartphones are a major platform for NFC technology as it can be integrated with NFC chips and tags.

For instance, end-users can read information embedded in various NFC smart posters in movie theatres using their NFC-enabled smartphones.

The market for NFC-enabled mobile phones reached a breakthrough in late 2011 and accelerated further in 2012 as new NFC handsets were introduced by all leading handset In vendors.

Notably absent among them was Apple with its iPhone; version 6 of its iOS mobile operating system does not support NFC.

Google, on the other hand, includes NFC functionality in their Android mobile operating system and provides an NFC payment service, Google Wallet.

Through 2012 Android-based smartphones dominated the NFC handset market with 103.1 million units, or 86%, of all NFC handsets shipped.

A major challenge currently facing the NFC handset market is the slow adoption of payment solutions. This slow adoption is primarily due to the popularity of other contactless technologies including contactless payment solutions such as credit cards, debit cards, and smartcards.

For the NFC payment ecosystem to function properly, high interoperability is required among value chain members such as mobile manufacturers, telecom service providers, and banks.

Key players currently dominating the NFC handset market include Nokia Corp., HTC Corp., Research in Motion Ltd., and Samsung Electronics Co. Ltd.

For more information on the NFC handset market, see the latest research: NFC Handset Market Research

Follow us on Twitter @CandMResearch