With all the new features in the iPhone 5, there have been a couple of standout omissions. Reuters, WSJ and others on Friday published articles about how last week’s iPhone 5 launch has put Europe in the slow lane and created winners and losers. Their reason: the device will not support LTE on the 2.6GHz and 800MHz bands, frequencies being most commonly used in Europe for 4G. Similarly, Apple’s decision not to include a “wave and pay” NFC chip has imparted a damning verdict on a technology that many consider the lynchpin of how point-of-sale mobile payments will work. NFC still stands for “Not For Commerce”! quipped the Guardian.
In the follow up to that, there have been some attempts at explanations, both from outside speculators and Apple itself, about why LTE has been configured as it has been; and why NFC is absent. Some interesting points (guesses) are being made — among them, it’s a longer-odds game to court carriers at other LTE frequencies (see this GigaOm post); there are problems with implementing an NFC antenna in a metal case (step up, NYT).
Ultimately, the two have-nots of LTE and NFC are connected. When AllThingsD, on the day Apple announced the iPhone 5, asked Phil Schiller, senior VP at Apple, why the company does not have NFC in the phone, his reply was simple: ”Passbook does the kinds of things customers need today.”
Extrapolating that, it’s as good an explanation for why Apple makes a fair amount of its decisions not to include other features, too. Apple makes choices about what is essential right now, and what is not, and it chooses not to roll out those that are not.
This is a fundamentally different approach compared to a company like Nokia, which has jumped on all sorts of developments over the years (N-Gage music phone through to wireless charging).
In the case of LTE, the frequencies that are not supported are also not being used commercially yet in Apple’s biggest markets. When they are, that would be the time to start supporting them. (Among the losers: France, Apple’s third biggest market in Europe; and UK operators that are not EE.)
Apple has never actually made much of a concession to be that inclusive — not in its earliest iterations of products, anyway. Just think about the iPhone’s debut: expensive, and exclusively with only one carrier in the U.S. For years. Then Apple extended to other markets, and then to other technologies beyond GSM. Once Apple did that, it grew its user base massively — meaning people didn’t stay away from the product later because Apple didn’t accomodate everything from the start. I believe the same will apply to universal LTE support.
With NFC, there is an argument to be made that it is just not that necessary yet in phones. A “checklist” item, as The Loop’s John Dalrymple calls it. Not a need-to-have item.
Figures from Gartner forecast $617 billion in mobile payments by 2016, but the analysts relegate NFC to “relatively low” usage until 2015. There are just too many moving parts (parts that, incidentally, Apple does not for the moment control). “NFC payment involves a change in user behavior and requires collaboration among stakeholders that includes banks, mobile carriers, card networks and merchants,” analyst Sandy Shen notes.
Apple is certainly not new-technology adverse — Siri has shown us as much — and in making the iPhone 5 thinner, a lot of the inside had to be re-engineered, as well as upgraded. But when it has put in state-of-art technology into its devices, it’s done so with a view to experience being the primary reason: “You’ve got to start with the customer experience and work back toward the technology, not the other way around,” Steve Jobs was once quoted as saying.
With a lot of technologies up in the air right now for making and processing mobile payments (there are the many dongle-based players like Square, PayPal, iZettle and more; there are barcode- and QR-code based processing options; there are text-based systems; and yet other technologies, such as near sound data-transfer technology, which uses the audio channel to transfer encrypted financial data) it also seems perfectly reasonable that Apple would step back and see how this plays out some more before getting more involved.
And when it does, it might be using something completely different.
And as MG Siegler pointed out in the TC Disrupt iPhone 5 de-brief last week after the announcement, there are potentially other routes to enabling short-range, contactless communications that are not NFC, such as the Broadcom 4330 chip, which iLounge notes supports dual-band 2.4 GHz and 5 GHz 802.11 a/b/g/n connectivity, as well as support for Bluetooth 4.0+HS. This chip is in this current iPhone 5 and it is also in Apple TV and the third-generation iPad. It’s not really used for anything now, he points out, so perhaps even this could be something for a future mobile payment solution.
Indeed, the fact that Apple owns a bunch of NFC patents could even be read two ways: one is that it’s going to eventually incorporate this; the second is that it’s investing in a technology as a defensive stance. (It’s hired NFC people, too, however, which makes the first of these more tempting to believe.)
Apple’s leaving NFC to one side for now in the iPhone may not be a step back for NFC — that’s just too overdramatic, considering how many excellent devices from Nokia, Samsung and others are getting rolled out with NFC incorporated — but it is certainly not a step forward. I won’t forget soon how many people I met at the last Mobile World Congress in Barcelona — where the subject of mobile payments was a big theme — noted that without Apple on board for NFC, it doesn’t seem as serious a consideration at the moment.
Then again, as with those LTE frequencies, just because Apple is not incorporating zippy payments technology now doesn’t mean it won’t in the future. Apple’s iPhone arrived on the market years after other smartphones. When it did, to paraphrase Jobs at the launch in 2007, it changed everything. One can be a trailblazer even if you’re not an early mover.
September 17, 2012