Great Expectations, but Are They Realistic? NFC in 2012
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Late 2011 and the early part of 2012 brought a lot of hype and exaggerated expectations to the NFC ecosystem, some of which we identified and discussed in a previous QuickCast. With our launch of the 2012 Voice of the Customer NFC series coming soon, we thought it would be useful to provide a retrospective analysis of what’s happened so far in 2012 and reset expectations in regards to the second half of this year and beyond. During this QuickCast, John Shuster reviews some of the major trends impacting the NFC ecosystem so far this year, focusing in on smart marketing and mobile wallets and giving some forecasts and expectations for the rest of 2012.
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Great Expectations, but Are They Realistic? NFC in 2012
- 1. AutoID & Transaction Automation Practice QuickCast Great Expectations, but are They Realistic? NFC in 2012 May 2012 By: John Shuster – Analyst © 2012 VDC Research QuickCast AutoID & Transaction Automation vdcresearch.com
- 2. Recording Available A full audio recording is available for download at: http://vdcresearch.com/market_research/autoid/freeresearch.aspx © 2012 VDC Research QuickCast AutoID & Transaction Automation vdcresearch.com
- 3. About Us Market Intelligence for Technology Vendors & Investors Direct-Contact Primary Market Research Deeply Segmented Data Expert Insights Validated Results Custom Consulting Services for Your Most Critical Business Decisions Research-Based Consulting Transparent Tools & Methodology o Highly Customized Survey Guides & Output Templates o Sophisticated Market Estimate & Forecast Models o Detailed, Flexible Stakeholder Maps & Profiles o Industry Development Scenarios o Market Opportunity Fit Screening, Rating & Ranking © 2012 VDC Research QuickCast AutoID & Transaction Automation vdcresearch.com
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- 6. Today’s Speaker John Shuster Analyst John is an analyst in the firm’s Auto ID practice and covers the markets for NFC, emerging RF solutions and Customer Engagement/Retail Automation Technologies. Prior to working as an Auto ID analyst, John worked in VDC’s Mobile and Wireless practice. John has also worked as an Associate at Stax, Inc., a Boston-based strategy consulting firm, focusing on investment diligence and market opportunity assessment engagements. During his post-graduate studies, John completed a year-long corporate residency program at BV Investment Partners (formerly Boston Ventures), a middle- market private equity firm, where he was responsible for supporting operations in the finance and accounting department. John is a graduate of Dickinson College (BA, English) and Northeastern University (MBA, finance). For complimentary insights and marketing data: http://blog.vdcresearch.com/autoid/ © 2012 VDC Research QuickCast AutoID & Transaction Automation vdcresearch.com
- 7. Today’s Agenda NFC Ecosystem: 2012 So Far Smart Marketing Gains Traction Mobile Wallet Wars Looking Forward: 2H 2012 & Beyond © 2012 VDC Research QuickCast AutoID & Transaction Automation vdcresearch.com vdcresearch.com
- 8. Reality Sets In… All good things take time—including the emergence of NFC 2012 YTD has Brought Progress Throughout the NFC Ecosystem New NFC smartphones available worldwide Other form factors emerging…slowly M.commerce/payment applications receiving investment Ticketing, info-tainment gaining momentum But, Not to the Degree Expected by Many Media hype/evangelism positioned market to fall short of expectations Contactless payment remains a longer-term opportunity in most regions General awareness/understanding remains low There is no NFC “On” Switch…Building this Ecosystem is a Gradual Process © 2012 VDC Research QuickCast AutoID & Transaction Automation vdcresearch.com
- 9. Smart Marketing Gains Traction Smartphones represent the hub of most NFC marketing initiatives…but other devices will emerge Printed Media Targeted Marketing/BI: Smart Posters Mobile Loyalty Magazine Ads Location-Based Product Packaging Others: Information Access: Authentication Mobile Couponing Channel Integration “Check-In” (e.g., Foursquare, Shopkick) © 2012 VDC Research QuickCast AutoID & Transaction Automation vdcresearch.com
- 10. Mobile Wallet Wars Expect consolidation, business failures to thin the herd Broad Availability Scaled Acceptance Initial Launch/Pilot Testing Merchant/Card Partner Recruitment Application Development Initial Investment Competition Rapidly Building As Mobile Wallets Proliferate Many different types of players involved Google Wallet, ISIS, V.me, Target, MasterCard, O2… Who wins? © 2012 VDC Research QuickCast AutoID & Transaction Automation vdcresearch.com
- 11. What Lies Ahead… Measured progress in many areas of the ecosystem; massive leaps forward unlikely… Resetting Expectations for 2H 2012 and Beyond… Smartphone shipments should meet expectations In or out, Apple will impact the entire ecosystem Secure applications—expected pilots will be a barometer Non-secure applications—more experimentation, limited scaling Key Markets/Applications to Watch Info-tainment—gaming, pairing/content streaming Automotive—personalization, pairing Adjacent Factors that Could Impact the Ecosystem EMV migration—USA only © 2012 VDC Research QuickCast AutoID & Transaction Automation vdcresearch.com
- 12. Thank You for Attending this VDC QuickCast Mike Collette – VP, Sales & Enterprise Accounts info@vdcresearch.com | 508.653.9000 x112 Michael Liard – Director, AutoID John Shuster – Analyst Richa Gupta – Analyst For complimentary insights and marketing data: http://blog.vdcresearch.com/autoid/ © 2012 VDC Research QuickCast AutoID & Transaction Automation vdcresearch.com
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- Limited infrastructure and device availabilitySlow adoptionDifficult to justify/Lack of education Low supply-side revenuesFacilitated adoption in APAC and EMEA due to existing infrastructure, higher user comfort levels and government initiatives.Majority of revenues from horizontal applications like payment, ticketing, marketing and access controlIncreased enterprise investment in NFC solutions for internal (i.e., non customer-facing) applications, including physical security/access control, logical/network security/access control, workforce monitoring/management and tracking/tracing applications.The emergence of alternative (i.e., non-smartphone) NFC device form factors during 2012 and beyond will further broaden NFC’s appeal as well as the potential use cases it can serve—both for enterprise and consumer end users.Governmental investment in NFC initiatives in certain country markets (e.g., Korea, France) will help drive regional contactless infrastructure deployment, application development and adoption.NFC application opportunities/use cases range from the very simple (P2P, pairing, information access) to the more complex (contactless payment, e-commerce). VDC expects most near-term activity will be related to applications that are relatively simple to deploy, do not require the cooperation of multiple stakeholders/decision makers and are deployed within the confines of a “closed loop” environment. Certainly, contactless payment and other commerce applications represent a tremendous opportunity for NFC; however, in most regions, VDC expects that these applications will remain challenged by barriers related to stakeholder cooperation and the availability of contactless infrastructure.
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