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Why the Apple iPhone 8 Should Support NFC Tags

UPDATE Sept 12th, 2017: Read the new post Finally Read NFC Tags with an iPhone App on iOS 11

This is the third post in our series on Apple iPhone support for NFC tags. If you haven’t read the previous posts yet, head over here and here so you’re up to speed.

It’s spring again, which means the rumor mill for the upcoming new iPhone 8 and iOS 9 is in full swing. This year is different though as it’s the 10th anniversary of the iPhone, so consumers are expecting something amazing. This hope is reinforced by the perceived lackluster iPhones of recent years, although the market doesn’t seem to share that sentiment. Consumers harken for the days of Steve Jobs dazzling them with each new iPhone release but lately it seems that the Apple Watch and other recent Apple products can’t quite match up to consumers’ expectations anymore. If the rumors are true, it does look like this year’s iPhone 8 will be something special. But will the new iPhone support NFC tags and other non-payment use cases?

 

Download the GoToTags iPhone App to read NFC tags and scan barcodes!

As we have covered in the previous articles, the iPhone 7 and Apple Watch do have NFC, but it’s only being used to support Apple Pay and VAS (Value Added Services) aka Passbook. Apple has yet to release an iOS NFC SDK to allow for app developers to build non-payment related functions. Several banks have made a big deal about this as it limits competition but Apple has pretty much won this battle with the “security” argument I’ve covered previously. So, given the story so far, what does the future hold? Will Apple ever support NFC tags?

To get a better understanding of the issue, we should realize that we’re probably asking the wrong question. Instead of “will”, the question should be, “Why should Apple support NFC tags?”. Apple has become the company it is today because it is very purposeful about what it does. Every device, feature, icon, color, sound and text is all there for a specific reason, and has likely also been prototyped and A/B tested over several iterations. This is what has given devices like the iPhone the prestige market position it has today. Apple’s competitors, in particular Google, apply more of an iterative, engineering based philosophy and are happy to put products out in the market to see how they perform and then refine them in future versions. You can see this reflected in how both companies have approached NFC.

Apple will support reading NFC tags in the iPhone when there is a reason to. So why haven’t they already? GoToTags has been working with NFC for 6 years, and we have watched the market develop over time. It’s quite amazing how little press NFC gets, given how it is transforming how we interact with items in the physical world. We work every day with companies large and small that are waking up to NFC and how it is changing their business. After 20,000+ orders of NFC tags, software and hardware and thousands of app users, the future has arrived early for some but it doesn’t seem like the press and bloggers have caught up yet. This silent groundswell adoption of NFC has been occurring in earnest over the last 18 months, yet it goes mainly unnoticed, including for the most part by Apple. This is partially due to the preliminary stages of many these projects, and the increasing importance of them over time. GoToTags has signed more NDAs than we can count for this reason.

NFC cannot stay hidden for much longer. GoToTags and others have been working for years with companies on prototype projects, that are now moving into full deployment. In these projects, NFC is changing the ways that products work and in some cases, redefining what companies are. The list of industries that NFC is changing is growing quickly and includes security, gaming, transportation, event ticketing, biotech, asset tracking, product authentication and product marketing. In these projects, NFC is either being embedded into a physical item (ticket, toy, product…) and/or NFC is the method in which digital items are transferred between devices.

These aren’t small projects either; GoToTags has many customers whose projects have deployed 100k+ NFC tags and a handful that have deployed 1M+. These projects are also becoming more consumer focused. Recently Nintendo released amiibo, which has NFC enabled physical characters, and we sold out of our stock of the NTAG215 chip type within hours (don’t worry, more on the way). All of this in a market where nobody knows that NFC is even happening.

What will change Apple’s mind? In many of these projects, because the iPhone does not support NFC tags, the business is either forced to choose Android as their device platform, or live in a world where their iPhone app is crippled compared to its Android counterpart. The NFC functionality is too important for these products. Thus, the iPhone loses its prestige and looks inferior to its Android competitors. That is a big deal and as soon as Apple believes this it will reassess its stance on NFC. Remember that originally Steve Jobs didn’t want to allow apps on the iPhone, yet they caved in due to market pressure from companies that wanted to offer products to consumers via mobile devices. Now the App Store is a massive revenue generator for Apple and an integral part of the mobile experience. NFC is the next step in the technology arms race. Do you think Apple is going to sit back and ignore Nintendo and others’ success?

Once the technological genie has been released it cannot be put back in the bottle. NFC is happening right now in a big way and thousands of companies are figuring out what it means to them. Apple is becoming more aware of this and looking at NFC use cases beyond payment. GoToTags is involved in several ways. We are working on a new series of blog posts that are more in-depth use cases for NFC. More importantly though, we are continuing to work with companies to help them think through all of this to make sure they don’t misstep or miss out. If you have read this far, you might want to just contact us to see how we can help you too.

What do you think? Tell us @gototags

Does the Apple iPhone 7 support NFC Tags?

UPDATE Sept 12th, 2017: Read the new post Finally Read NFC Tags with an iPhone App on iOS 11

Apple just had their annual September big event, this time announcing the iPhone 7, iPhone 7 Plus and Apple Watch Series 2. So how are they? Depends on where you’re coming from. If you were already an Apple fan, these products are great and represent Apple’s continual iterative push for innovative, useful and beautiful products. If you were already not an Apple fan, then you saw this as the 3rd year of an overhyped, lackluster product announcement with products lagging behind other devices from Google and Samsung. Then there is the issue of removing the headphone jack…

 

Download the GoToTags iPhone App to read NFC tags and scan barcodes!

But does the new iPhone have the NFCs!? (inside joke) The short story is yes, it supports NFC. Yes Apple is expanding what NFC can do but no, it does not yet support reading and writing NFC tags. If you haven’t read our original post on this topic, I suggest you read it first. Here we are six months later and all of our claims still hold true. Now lets take a look ahead. Based on evidence we’re seeing, we expect the following progression to occur.

The big development for NFC is that Apple announced support for FeliCa in Apple Pay. You’ve never heard of FeliCa? You have likely never been to Japan. FeliCa is the dominant mobile payment system in Japan where it is used in most people’s daily routine; transportation, stores, restaurants, web… Think of it as an expanded version of London’s Oyster card, but where you can pay for more things than just public transport. The USA lacks a true corollary; but we’re really just talking about a more efficient way to pay for goods and services. The technical implementation of FeliCa is totally different than “traditional” Apple Pay and EMV; FeliCa stores the value on the card itself vs in the cloud. “I don’t live in Japan, so why is this a big thing?” Because it’s a sign that Apple is expanding what NFC can do in the iPhone. Call me optimistic, but I am looking at it like this; there are only three sets of numbers; 0, 1 and many. Two years ago Apple did not support NFC at all (0), previously Apple supported NFC via Apple Pay (1) and now Apple is adding support for FeliCa (many). It’s not as a big of a leap for Apple to start adding additional uses for NFC within the iPhone; things like NFC tag reading and writing. As we said back in March, the more that consumers learn to trust that they can use their mobile device as a magic wand to interact with the world, the more you will see new deployments of this technology. Companies like Apple will add support to meet that demand.

So how is Apple Pay doing? Great, but a bit slower than they had hoped. Since our original post Apple has expanded Apple Pay throughout Europe, Hong Kong and beyond with a total of 9 major markets. Apple Pay is available at 11+ million locations worldwide and growth is doubling. This fall they are expanding to New Zealand, Russia and more. Apple Pay’s success and continued expansion is pretty amazing considering the number of geographic, cultural and political hurdles to overcome. Remember it’s hard to get people to change their daily behaviors and to trust new ways, especially when it comes to money. Importantly, there still has not been a single security issue with Apple Pay or the NFC hardware in the iPhone. This is all good.

When will Apple support NFC tags though? When they feel the time is right; and by right I mean when they feel that Apple pay has succeeded, consumer’s trust has been earned in contactless interactions and there is enough external pressure. You can’t rush Apple. A lesson learned this summer when a group of Australian banks tried to force Apple to open up access to the NFC controller so they could build their own competitive mobile payment system. Apple quickly shot this down with the argument that it would “diminish security” and that Apple is protecting consumers. This of course is not entirely true, but it takes too many words to understand why not so it’s a beautiful argument. In reality, Apple is using this to block competitors to Apple Pay because there are billions of dollars in profit to be made.

Hope is not lost for the iPhone reading and writing NFC tags though. Without getting too technical, there are multiple components that comprise the NFC system in the iPhone. Part of this is the NFC controller (radio) and part of this is the secure element (bank vault).  For a mobile payment systems to work it needs access to both the NFC controller and the secure element as it needs to securely store data for the financial transaction processing. Functionality such as NFC tag reading and writing does not need access to the secure element, but only access to the NFC controller. This difference is key. Apple will never open up access to the secure element as it would allow for competitors to build other mobile payment systems; Apple will always use the argument of “diminish security” to prevent this. However they can easily open up access to the NFC controller to allow for non-payment use cases. This is what we expect to see happen.

Does this even matter? Depends on how close to Cupertino you live. In the USA where the cult of Apple is stronger, the lack of NFC tag support in the iPhone is a bigger deal. Outside of the USA this isn’t as true. GoToTags has recently expanded to Europe and sees the NFC market as strong and growing. In areas like South America the iPhone is almost irrelevant, with Android dominating the market. GoToTags works everyday with companies worldwide to develop their product strategy for NFC, for both internal and consumer uses of NFC. NFC tags can be found everywhere and are going into everything; without most people even realizing it. NFC is being used for product information in retail, for anti-counterfeiting of products, physical security, assets tracking, gaming and out-of-home marketing; oh.. and mobile payment too. When NFC tags are combined with a management and analytics system such as the GoToTags Platform and other IoT tag technologies, it allows for even more functionality and value to be derived.

Someday Apple will have a big event and tell the world about the other uses for NFC. When that happens the Apple fans will see it as continual innovation at the “right time”, and the non Apple fans will see it as the iPhone finally catching up. Either way, it’s already happening now. The sooner you start planning for it, the more ready you will be for it. We can help.

What do you think? Tell us @gototags

Will Apple support NFC tags in iOS 10 for the iPhone 7?

UPDATE Sept 12th, 2017: Read the new post Finally Read NFC Tags with an iPhone App on iOS 11

It’s spring again and the Apple NFC rumor mill is heating up. In the fall of 2014 Apple added NFC hardware to the iPhone 6 and iPhone 6 Plus to support the Apple Pay mobile payment system. But that was the only thing the iPhone could do with NFC. Since Apple didn’t open up SDK access to the NFC controller for other developers, the NFC hardware inside the phone was severely limited to the types of applications it could be used for. Now its 2016 and Apple is expected to release new iPhone models along with an updated iOS. Will we will finally see support for additional NFC functions on Apple products?

 

Download the GoToTags iPhone App to read NFC tags and scan barcodes!

If you’re savvy with NFC, you know NFC is used for far more than just payments; including marketing, security, asset tracking, events, gaming… the list is long. NFC is one of several tag technologies that allow things in the physical world to be connected with their online counterparts. Other tag technologies include printed barcodes and QR codes, Bluetooth based tags such as Apple’s iBeacon and BLE, UHF RFID and a handful of other lesser known technologies. NFC plays a unique role within this family of technology; it’s low cost compared to most other technologies, is uniquely identifiable, is difficult to be cloned and its very short range captures the consumer’s intention. NFC tags can be deployed on physical items for non-payment uses forming an “Internet of Things”. Mobile payments is just one, very lucrative usage of NFC.

So why hasn’t Apple opened up support for these other uses of NFC? Security and trust. Mobile payments are a big deal. They represent a fundamental change in the way that money flows through the system, from the consumer all the way through the banks and companies. Several large industries are built up to enable this and collect a toll as the money moves. By changing and controlling the existing transaction flow, Apple, and other mobile payment providers hope to route money through their systems and subsequently be the ones to collect the toll. Apple likely negotiated reduced rates from banks on the guarantees of increased security, lower fraud rates and high consumer usage.

There is a lot of on the line for Apple Pay to succeed. Apple knows that to change consumer behavior on this level they must gain and keep the consumer’s trust. A single public security breach would put the entire project in jeopardy. So like the fingerprint scanner before it, Apple is likely limiting access to the NFC controller for an initial period of time. The security industry calls this “reducing the surface area”. This allows the consumers time to become comfortable with NFC and mobile payments and allows Apple time to work out any security issues that come up. From Apple’s perspective the risk of a public security issue in Apple Pay outweighs the benefits of using NFC for other applications.

Apple Pay has been in the market for almost two years without a single public security issue being disclosed. Nice work! Now Apple might be looking towards the future for what else it can do with NFC. Rumors are popping up that Apple could open up the NFC controller to other developers to use.

Will they open it up to everyone, or just other payment companies? Or will they continue to keep NFC closed to increase the usage and momentum of Apple Pay over their competitors’ Android Pay, Samsung Wallet… We don’t know yet. What is clear is that NFC is happening in other verticals besides payments and Apple isn’t clueless about that; they just have other priorities on their mind for the moment. In the meantime we recommend that companies get started now with NFC trials so they understand how to leverage NFC in their business such that they are ready when it does open up. 

What do you think? Tell us @gototags