Research in Motion (RIM), maker of BlackBerry smartphones, is in a battle with mobile operators over its plans to use NFC in its forthcoming devices. NFC, short for “near field communication,” is a technology that will enable mobile payments and mobile wallet-type applications, allowing customers to wave or tap their phones at point-of-sale to pay for purchases. According to a report from The Wall St. Journal today, the disagreement between RIM and the carriers has to do with where the credentials for these mobile payments will be stored – on a SIM card inserted into the phone, or, as RIM would have it, in a secure area within the BlackBerry device itself.
Meanwhile, in other NFC-related news, it appears that the iPhone 5 may have NFC capabilities after all, despite earlier reports saying plans for this had been scrapped.
For more on NFC, tune into our ongoing series, NFC in 2011. You can view earlier articles on that technology by clicking on the tag NFC 2011.
RIM vs. Carriers: Fighting for Control of the Mobile Wallet
There are several ways NFC can be implemented on a smartphone to enable mobile payments. It can be fully integrated into the handset, such as is the case with Google’s latest flagship phone, the Nexus S. It can exist on a removable microSD card which fits into slots on the phone, or can be inserted into accessories like cases or sleeves, such as is the case with Visa’s iPhone case for its In2Pay solution. Or it can be integrated into a SIM card – the card that identifies a mobile subscriber on an operator’s cellular network.
The method of implementation is what’s causing the rift between the carriers and RIM, according to the report from the WSJ today. Although the carriers expected to be cut out of the deal when Apple launched its NFC-enabled iPhone, RIM has traditionally been more carrier-friendly. For example, RIM did not preload its mobile app store on some of its devices so carriers could preload their own stores instead, reports WSJ.
The carriers say that putting NFC onto the SIM card is good for consumers because it doesn’t tie the users to one device – they can move their SIM card from phone to phone as they see fit. But obviously, having the technology present on the carrier-provided SIM would be good for the operators too, as it would allow them to be actively involved in the mobile payments system.
However, both RIM, and supposedly Apple, have plans to integrate the NFC technology into the phone itself, cutting the operators out of the deal. Now, the WSJ reports that the carriers are putting pressure on RIM, which is reaching out to banks on its own, to reconsider the way its choosing to implement NFC.
iPhone 5 to have NFC (Rumor)
In a related story, a new rumor is circulating today that contradicts an earlier report regarding NFC in the next iPhone release, the iPhone 5. On Monday, U.K.’s The Independent newspaper cited sources at several of the largest mobile operators in the U.K. as saying that Apple does not plan to implement NFC technology in the iPhone 5. Reportedly, Apple is concerned about the lack of an industry standard for the technology.
To us, that first report seemed misleading, not only because NFC has been an approved standard since 2003, but because the way the carriers are joining forces now to prepare their own NFC initiatives seems to imply some sort of immediate threat on the horizon. At last month’s Mobile World Congress in Barcelona, 16 operators teamed up to announce their intentions to launch commercial NFC services. And in the U.S., three of the four top carriers have formed Isis, a mobile payments venture that will provide NFC-enabled credit, debit and prepaid accounts to users.
Today’s report from Forbes, while not as well-sourced at The Independent’s, simply feels more accurate. The source for the report is an Apple employee, who’s a friend of some unnamed entrepreneur, which puts this decidedly in “rumor” territory. Reportedly, Apple is working on a top-secret NFC project, the article claims.
Elsewhere, Cult of Mac claims to have more details. It says that Apple will use NFC in a system that will allow users to log into another computer using an NFC-equipped iPhone. The iPhone will pair with the host machine and load files and settings over the Internet.
While that would certainly be a neat trick, we find it hard to believe that’s the extent of Apple’s NFC plans. As everything moves to the cloud, the idea that iPhones have to physically pair with a computer in order to properly function becomes more and more passé, no matter how many new bells and whistles you introduce to make that process easier.
At the end of the day, the question is not whether Apple is working on an NFC-enabled iPhone, the question is how much of the NFC functionality, if any, will be available in iPhone 5 as opposed to the iPhone 6 and later devices. But NFC is coming to the iPhone, that much you can count on.
