Juniper Research forecasts that one in every six mobile subscribers worldwide will have a Near-Field-Communication-enabled mobile device by 2014 and that NFC represents a $110 billion opportunity.

Currently adoption is centered on the Far East, with use very limited outside of this region. The NFC report determined that payments and retail transactions such as coupons would combine to transform the phone into not only a payment tool, but also a retail tool in addition to its many current functions.

“We see significant traction for NFC going forward to the extent that we’re forecasting about one in six wireless subscribers will have an NFC-capable phone by 2014,” said Howard Wilcox, Basingstoke, England-based senior analyst at Juniper Research. “Once that technology is out there, we’re going to have so many functions related to buying things and paying for them via NFC.

“The mobile phone is an indispensible device you don’t leave home without, and that will be even more true in the future, because it will replace your wallet,” he said.

Juniper Research provides research and analytical services to the global hi-tech communications sector, providing consultancy, analyst reports and industry commentary.

The NFC whitepaper and further details of the study “NFC Mobile Payments & Marketing Opportunities: Forecasts & Analysis 2009 – 2014” can be freely downloaded from the Juniper Web site.

Juniper Research conducted primary research interviews with CxO-level management from key industry players.

The new report from Juniper Research forecasts that mobile payments and retail applications will drive NFC adoption, although business-model and technology hurdles remain.

Nokia knows NFC
The first handset manufacturer that has made an announcement related to a commercial release of an NFC-enabled handset is Nokia, which announced in April the roll-out of the 6212 Classic.

While Nokia has not actually set a specific date for when the company will be making commercial shipments, it will most likely be launched in selective markets in the fourth quarter of this year.

“I would expect next year we’ll be seeing announcements by several more vendors,” Mr. Wilcox said.

Still some obstacles
Juniper’s research found that both the business model and the rollout of point-of-sale NFC readers at merchant locations are issues that need solving, depending on the country.

As these are overcome, NFC is poised to enter an operational build-up phase culminating in mass service rollouts across many countries, typically in metro areas driven by transport ticketing, according to Mr. Wilcox.

Juniper projects that by 2014, NFC global gross transaction value will exceed $110 billion.

“There are still a lot of business model issues to be sorted, and until they are, they will certainly hold things up,” Mr. Wilcox said. “This is not just a U.S. issue, it’s a wider global issue.”

Asia in the lead
NFC/Felica payments are already established in Japan, but by 2014 North America and Western Europe will be experiencing high growth. In fact, an NFC service has gone live in Europe with Mobilkom Austria A1.

The Maxis FastTap NFC service service has gone live in Malaysia.

“The Maxis FastTap service again shows that that region of the world is at the forefront of NFC,” Mr. Wilcox said.

“It’s a collaborative development involving all of the key parties, which rolled out the NFC service across a number of retail service outlets, including fast food and coffee chains such as Dunkin’ Donuts and in the transport sector with buses and rapid-transit stations, all the sorts of places that I would expect NFC to be springing up,” he said.

In the U.S., an NFC pilot program involving payments processor First Data, Sprint, San Francisco’s Bay Area Rapid Transport system and burger chain Jack in the Box was signaled a success for mobile commerce (see story).

In addition, financial services giants such as Visa (see story) and MasterCard (see story) have ramped up their investments in NFC technology.

“In terms of POS readers that are out there, you already have a lot of NFC-enabled merchants in the U.S.,” Mr. Wilcox said. “In some parts of the world, it is the merchants that don’t have the reader infrastructure, but that’s not so much the issue in the States.

“The U.S. is dealing with the global issue of the availability of handsets that have NFC chips in them,” he said. “The Nokia announcement is a good one, and we’ll see more next year.

“Clearly the U.S. is a prime market for NFC.”

NFC for mobile marketers
The Juniper Research report examines the opportunities available in both the mobile payments market and the mobile retail market, including smart posters and coupons, as well as newly emerging interim solutions such as stickers and Secure Digital (SD) cards.

The Juniper report features detailed six-year forecasts across eight regions of the world for shipments of NFC enabled devices and interim NFC solutions, NFC devices in use for payments, transactions traffic, NFC transaction value and coupons, as well as smart poster average revenue per user (ARPU) until 2014.

Retailing ARPU from NFC coupons and smart posters will exceed ARPU from NFC payment transactions, according to the Juniper report.

“We also see significant opportunities for NFC-based coupons and smart posters going forward,” Mr. Wilcox said. “We’ve mostly been talking about NFC in regards to payments, but there are also significant opportunities in terms of boosting retail ARPU.”