Near Field Communication (NFC) – the technology that supports close proximity mobile payment services – has been around for many years. However, up until recently, the NFC-enabled mobile devices and service support needed to make such payments a reality have been lacking.

In this video blog, Ryan Garner looks at the barriers to adoption, demonstrating that Trust and Familiarity of supplier brands will drive consumer preference and arguing the need for co-operation between brands from different sectors.

To read the full report, please click here.
To read the report article in the Free TechTalk Magazine, please click here.

NFC technology has the ability to transform smartphones into virtual wallets, where users pay for transactions simply by waving their phone at an appropriate receiver terminal. However, it also has much wider applications, allowing for synchronised content and services across the mobile ecosystem [1]. The reward for owning this relationship in the mobile space is enormous, and as a result everyone, from mobile operators to device manufacturers, is fighting for a share.

The industry message seems clear; mobile payments will be big over the next five years – big news and big profits. The technology has been around in various forms for years and, now that leading names such as Apple, Google and RIM are designing and manufacturing NFC-equipped devices, many commentators predict that mobile payments will skyrocket [2].

However, while this will undoubtedly be a major growth area for the future, such reports seldom address the fact that the journey to full consumer adoption is not without its pitfalls.

Gone are the days consumers choose mobile phones based solely on their features and functions. New research by GfK[1] shows that smartphone owners in key global markets buy into the ‘experiences’ created by the mobile ecosystem and the majority (56%) are ‘keeping their options open’, when deciding their next smartphone purchase.

Every quarter brings new reports of rapid growth in smartphones sales but a key question left unanswered is what is actually driving purchase in the high end smartphone category? Understanding drivers of purchase is naturally a complex subject due to the sheer number of factors that influence consumer decision making. Looking back as little as 3 years ago, the primary focus for many consumers was acquiring a well designed phone packed with the latest technology such as Wi-Fi, GPS, high resolution camera and so on. In recent years, however, development in mobile hardware has slowed and is arguably becoming less important. Of course, consumers still want good looking handsets with the latest technology, but with so much choice and less differentiation the mobile handset is potentially becoming a more commoditised purchase.

High levels of consideration for competitor tablets suggest Apple won’t have it all their own way in 2011 but they’ll be thankful for the competition in the long run.

A recent article in The Guardian [1] posited that one of the best things that could happen to Apple to ensure continued success of the iPad was for competitors to launch tablet computers, and for these products to enjoy moderate levels of success. As happened with the iPod many moons ago, the thinking here is that a batch of serious rival devices would help cement tablets as a ‘legitimate’ category in consumers’ minds, encouraging continued sales and crucially allowing Apple to progressively refine and release further iterations of their hardware. (Although the impressive sales of the iPad so far would suggest this won’t be an issue.)

Smartphone operating systems (OS) have become arguably ‘the’ most critical factor in the mobile device market in recent times. Whilst obviously being crucial to the functional capabilities of a mobile device, they are now also seen as the cornerstone of its revenue potential. This has brought about a fascinating battle amongst the biggest names in the mobile and Internet markets, all looking to ensure their OS is the market leader. The result of this battle is likely to have a significant influence on who will dominate these markets during the next few years.

Phones with advanced operating systems now account for approximately 70% of the contract market in the UK*. This has led to a significant market share decline for Symbian, which has for some time been the most prevalent OS in the market, and increased competition amongst the four key operating systems at the higher end of the market – RIM’s BlackBerry OS, Apple’s iOS, Microsoft’s Windows Mobile, and the newest OS to the market, Google’s Android.

In the PC market, Microsoft’s Windows OS is as common as the mobile phone in your pocket. However, Windows Mobile has struggled to capture the imagination of both consumers and businesses. In fact, with a rapidly declining 5% [1] of the global smartphone market it’s fair to say that relatively speaking Windows Mobile has been a horrible failure. But that’s all about to change.

Recent research by GfK NOP [2] shows that interest in Windows Phone 7 (the catchy name given to the successor of Windows Mobile 6.5) is strong. Almost one in five (18%) of UK mobile phone owners say they would consider a Windows Phone 7 (let’s go with WP7 from here on in) handset (available on HTC and Samsung devices among others) when they next come to renew, upgrade or buy their next mobile phone. Of course current smartphone owners display much higher levels of interest (32%). What’s more, Microsoft will be pleased to hear that of all smartphone owners, those using Google’s Android will be most interested (41%) in WP7. So what’s changed?