IPhone 6 to get NFC - Morgan Stanley analysts

Speculation is again bubbling up that the iPhone 6 will see Apple finally embrace NFC, with Morgan Stanley analysts predicting the technology will be a "core part" of the tech giant's mobile payments strategy.

  32 7 comments

IPhone 6 to get NFC - Morgan Stanley analysts

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This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

Apple has been tipped to incorporate NFC chips in the iPhone for years but has so far ignored the technology, instead focusing its mobile money efforts on the Passbook wallet and Bluetooth Low Energy iBeacons.

Last month Ming Chi-Kuo, a KGI securities analyst with a prescient track record in forecasting Apple's plans, kicked off this year's round of speculation, confidently predicting in a note to investors that Apple will include NFC chips in this year's iPhone models, and offer support for the technology on its forthcoming iWatch.

Now Morgan Stanley analysts have followed suit. In a group report, the bank's Katy Huberty says: "Mobile payments is a major opportunity for Apple to improve user experiences and potentially add a new revenue stream."

Huberty's colleague Craig Hettenbach predicts that NFC will be a core part of Apple's assault on payments, citing the recent patent filings by the company and the emergence of Host Card Emulation, which would let Apple break free from wireless operators.

He also notes that the new mPOS system Apple is rolling out in its stores includes a VeriFone-made iPhone sleeve that is equipped for NFC, and highlights recent reports of a contactless payments agreement with China UnionPay.

If the iPhone 6 does get NFC, it is unlikely to wow Brits. Research from GMI shows that contactless payments are at the bottom of the list of concerns when people buy a new smarthphone.

Just 20% of survey respondents say NFC payments are important, with 53% saying they are unimportant. In contrast, 89% think battery life is critical and 65% want a high quality camera.

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Comments: (7)

A Finextra member 

Will the industry go weak in the knees now?.. iPhone with NFC means little per se (especially outside the US) - yes, it could send the right message to all the players, but Apple has an agenda of its own, and they are not likely to let others profit (easily) from its innovation.

Cornering the payments industry (merchants, issuers, card networks, etc.) is far more challenging - IMHO - than doing the same with the music industry. The latter was in pain (piracy etc.) and needed some fresh air. Payments mostly work...

Also, with music Apple had to convince a dozen of record labels to get the ball rolling. With payments, we are talking about hundreds of key issuers, and thousands of major merchants. In every country...

Matt Jones

Matt Jones Director at Payments Culture

I disagree that NFC means little per se. There are elements to NFC such as high value contactless and aspects of loyalty schemes where a lack of Apple NFC is a barrier to progress right now.

Some solutions need a tap for android devices but a QR (or similar) scan with a barcode reader for Apple devices... Therefore for simplicity's sake often the scan approach is opted for...

Currently I can't use my Starbucks app to pay as my iPhone screen has cracked. If the app was NFC rather than barcode based then I would not have this problem... Anyway, will be interesting to see whether it does it NFC or not...

A Finextra member 

No need to wait for iPhone 6 - www.ifixexpress.co.uk :)

Hm, does Starbucks app support NFC interface?..

Matt Jones

Matt Jones Director at Payments Culture

SB app doesn't support NFC at the moment you're right

Colin Weir

Colin Weir CEO at Moroku

NFC is a ticket to the payments game. The innovation will surely happen around it and will almost certainy leave those behind who dont play.

Scan is cumbersome and yesterday

Embed, move on

A Finextra member 

Samsung dropped eSE when they released 5S (except few territories). The problem is not tech, but MNOs and the banks...

A Finextra member 

Could be interesting if they manage to establish an API for an open wallet standard (supporting all cardschemes - payment or loyalty). Consumers do not like having duplicate apps that perform the same function - having a single app supporting all their "card" types/schemes - and consolidating multi-channel interfaces (ie Online/Mobile Banking) it could be a very interesting push. From a loyalty perspective I'm assuming there would need to be two Application Selection flows - the first identifying a mutually supported Loyalty AID, the Second flow identifying a Payment AID...

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