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This in-depth market intelligence program from VDC will help suppliers and other stakeholders sharpen their value propositions and solution development efforts in the NFC marketplace. Our Near Field Communication (NFC) Ecosystem Market Intelligence Program will analyze the markets for major NFC components and solutions across key economic sectors. VDC delivers the most comprehensive and accurate market research and analysis of NFC market available from any source.
This executive brief provides an overview of our coverage and analysis for this volume. The full research report offers deeply segmented data and analysis that is extremely actionable and we encourage you to contact us to learn more.
NFC solution opportunities and requirements vary widely along a number of segment definitions
Coverage focusing on technology segments, vertical markets and distribution channels
Technology Segments Addressing quantitative and qualitative issues shaping the current and anticipated demand for NFC solutions, including revenue and unit market estimates, forecasts and analysis of the trends and issues impacting market growth opportunities.
Vertical Markets Focused on primary NEC vertical markets and applications and addresses the quantitative and qualitative issues shaping the current and future demand for NEC solutions, including revenue and unit market estimates, forecasts and analysis of the trends and issues impacting growth opportunities, and End User NFC solution requirements, preferences, expenditures and usage.
Distribution Channels Focused on key NEC distribution channels and addresses the issues shaping the current and future demand for NEC solutions in the context of sales and distribution strategies.
As NFC devices especially smartphones market expected to follow reach consumers, growth in the broader
Global demand for NFC hardware reached new heights in 2012. Through 2015, VDC expects robust growth across all hardware categories. A number of key drivers will drive demand growth for NFC hardware and solutions, including:
APAC leads regional demand, as this market is comprised of a number of countries with robust contactless infrastructure installed bases that have had better accessibility to a range of NFC-enabled devices in the past. Furthermore, certain national governments within APAC are investing in NFC initiatives as well, giving an added boost to the region.
Like APAC, EMEA is defined by a number of national markets with relatively strong contactless infrastructure, albeit to a lesser extent. Governmental support (e.g., France) has also been seen in EMEA as well, but the region historically has not had widespread accessibility to NFC-enabled devices.
The Americas lag in NFC adoption, largely due to a weak installed base of contactless infrastructure and historically poor availability of NFC devices. However, NFC initiatives at a number of major corporations is expected to drive significant near-term growth.
In the near-term, transportation and hospitality are expected to be leading vertical adopters of NFC solutions, particularly for ticketing and physical security/access control applications. Retail presents another strong opportunity for solution providers, although most retail-driven activity in the next 12-24 months is expected to be non-payment related.
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 environment. Certainly, contactless payment and other commerce applications represent a tremendous opportunity for NEC; however, in most regions, VDC expects that these applications will remain challenged by barriers related to stakeholder cooperation and the availability of contactless infrastructure.
Partnerships and alliances will increase as deploying enterprises seek easily deployed, comprehensive solutions
Like most rapidly evolving, customer-facing hardware markets, hardware prices are beginning to face increasing price sensitivity and margin constraints, more so for consumer devices. In many instances, the cost of enabling a consumer device such as a smartphone with NFC is expected to result in a moderate price increase, if any. This will cause more pressure to reduce cost within the value chain.
NFC Hardware suppliers are forging partnerships and alliances amongst themselves and with application/software developers in order to develop application-specific solutions that can be rapidly deployed, integrated and scaled. As the technology gains more traction with the consumer- creating pull-demand for the enterprise, these partnerships will become more critical, particularly for application development and integration.
NFC-enabled smartphone shipments are the key driver in mobile readers, and to a lesser extent, the broader reader market. NFC market participants commonly expect 2012 to be a year of exponential growth in NFC-enabled smartphones, with expectations generally in the 100M units range.
A vast range of hardware suppliers are pursuing the NFC reader devices market from many different angles. Key participants include major smartphone handset manufacturers, payment terminal/solution providers, physical and logical access control solution vendors and consumer electronics companies, just to name a few. As NEC gains traction with end users and the technology is integrated into an increasing range of form factors, there will be even more opportunity for suppliers. Opportunity certainly exists in the market for Ics and transponders as well, but not to the extent seen in the reader space.
APAC leads due in large part to a robust installed base of contactless infrastructure
Global Demand for NFC Devices Segmented by Region
(CAGR 2010-2015 = 25.2%)
Global Demand for NEC Devices
(Excluding HE Smartcard Systems) Segmented by Region
(CAGR 2010 2015 = 74.9%)
John Shuster, Analyst
Michael Liard, Director, RFID
Drew Nathanson, Vice President