SMARTRAC and ABI Research Examine the Future for NFC Tags

The market for NFC tags is growing well, but what does the future hold, particularly in the face of competing technologies? SMARTRAC and high-tech research company ABI take a look into their crystal balls.*

 

SMARTRAC is seeing increased demand for NFC tags in key markets following Apple’s launch of the iPhone 6, and not only. Even in its umpteenth reincarnation, Apple’s iconic smartphone is still by far the most influential device out there — and its influence is likely to change NFC ecosystems forever.


Incorporating NFC into smartphones is not exactly an innovation – the likes of Blackberry, Google, HTC, LG, Microsoft/Nokia, Motorola, Samsung and Sony have done that before. Application-wise there has been no breakthrough for NFC tag usage, yet.


At least in part, this was due to the fact that iPhone users were left out. Particularly in the world of brands and their marketing agencies, which are traditionally biased towards Apple technology, this has slowed the deployment of NFC. In turn, Apple’s new commitment to NFC in the area of payment and its virtually unlimited range of applications and use cases will give several key markets a strong boost. Based on its expertise, footprint and long-term NFC experience, SMARTRAC expects two sectors of the NFC tags market to thrive in particular.


Brands and retailers


Brands and retailers can enhance the customer experience by introducing “NFC-enhanced touch points” to better connect their customers with offline brand experiences. Those offline experiences could involve actual products, or other branded physical items. NFC offers endless opportunities for marketing, campaigns, promotions, discounts and customer loyalty or membership benefits.


Also, with NFC tags integrated into their products, brands and retailers can better keep in touch with their customers over a product’s complete lifetime. By enabling a tight connection between physical objects and Web-based services and apps, NFC technology can enhance overall product value by providing a broad range of value-added services to the product user.


Toys and games industry


A very significant amount of today’s revenue from app stores is generated by games and related in-app purchases. By leveraging NFC-tagged toys, figures, collectable cards or other physical objects as a link to virtual gaming worlds, totally new opportunities could open up: firstly to create an unprecedented user experience for both young children and “older” smartphone users; and secondly, NFC can generate new monetization options for game developers and toy manufacturers.

 

For further information, please watch the video statement by Corey Wilson, Senior Director Global Business Development & Consumer Experience at SMARTRAC.

 

 

ABI Research confirms market potential and takes a look at SMARTRAC’s position

 

According to ABI Research’s NFC Market Data (MD-NEFC-158), approximately 70 million NFC tags were shipped in 2013, primarily into the gaming, smart posters, marketing, loyalty, information content, social networking, pairing and validation markets.

 

Further, the company is convinced that NFC is now entering the mainstream, as predicted in its press release entitled “NFC will Come Out of the Trial Phase in 2013 as 285 Million Enabled Devices are Expected to be Shipped”.

 

A bright future for NFC

 

Usage of NFC tags is still at an extremely low level when you consider the potential market opportunity. In addition to expected expansion within out-of-home, pairing, validation, loyalty, and information content markets, new use cases will soon start to take off. A fresh focus will likely center around mobile gaming, as well as greater efforts by brands to provide a method to authenticate products. Further, including NFC in other, non-connected static objects will enable new interactive experiences.

 

The “connectable” market is potentially huge, according to ABI: the company expects some 36.4 billion devices to be connected to the Internet by 2020.

 

So, the future is bright for NFC tag uptake. Interest in the technology is growing, and this was further boosted on September 9, 2014, when Apple announced NFC inclusion within its iPhone 6 and iWatch. Despite the fact that Apple’s NFC functionality remains currently locked and does not support tag reading (although this will probably be temporary), it was a welcome announcement, and one that will no doubt increase the profile and understanding of NFC technology.

 

ABI sees SMARTRAC surfing the NFC wave

 

SMARTRAC is the leading inlay vendor, and achieved an NFC tag market share of nearly 75% in 2013. The company is already providing added value to its NFC tag portfolio through its SMART COSMOS platform, a set of Cloud-based Services that allow the management and use of data generated by the tags. Through the platform, the company offers tracking capabilities for RFID and NFC chipsets throughout the value chain, information about manufacture origin, type of antenna used, and IC manufacture details, in order to provide end-users with transparent services.

 

SMARTRAC will continue to expand its product portfolio and capabilities to increase appeal, functionality, and the levels of added value it can offer, and to ensure that it remains at the cutting edge of RFID and NFC technology. It will also provide customers with complementary services that enhance their understanding of their end users and product life cycles.

 

To read the complete Insight report “What’s Behind SMARTRAC’s NFC Tag Success?” from ABI, click here.

 

* Sections of this article have been reproduced with permission from “What’s Behind SMARTRAC’s NFC Tag Success?” ABI Research, October 17, 
2014.