Near field communication (NFC) is a short-range connectivity technology. It is based on radio frequency identification (RFID) and uses magnetic induction coupling for allowing communication among electronic devices wirelessly. Moreover, it offers features such as access to digital content and connection among electronic devices by bringing devices into close proximity of around 4 inches. NFC provides an identification protocol that authenticates secure data transfer, enabling users to perform safe and contactless transactions. So far, adoption in mobile phones has been the major focus of NFC industry players.
The global near field communication market is estimated to be valued at US$ 22,282.8 million in 2021 and is expected to exhibit a CAGR of 16.4 % over the forecast period (2021-2028).
North America held dominant position in the global near field communication market in 2020, accounting for 31.6% share in terms of volume, followed by Asia Pacific and Europe, respectively.
Figure 1. Global Near Field Communication Market Value (US$ Mn), by Region, 2020
Global Near Field Communication Market: Drivers
Improved user experience and size reduction is expected to drive growth of the global near field communication market during the forecast period
NFC provides various benefits such as enhanced security, extended payment functionality, high level of convenience, and faster transactions, which has supported customers to adopt NFC for mobile payment. NFC offers improved user experience as compared to other contactless card technologies owing to faster transfer rates and higher security. Moreover, unlike conventional payment processes, NFC removes the need for payment device or instrument to be touched for initiating the payment processes. Besides, NFC eliminates the limitation of no real-time connection between card and money issuing institute associated with the process of payment through card. Moreover, in case of transactions through mobile handsets, network issues are shifted to mobile network operators rather than financial institutes as is the case with card-based transactions. Any network capacity issue is better resolved by operators rather than financial institutes. Thus, these factors are expected to drive growth of the global near field communication market during the forecast period.
Increasing popularity of mobile commerce is expected to propel the global near field communication market growth over the forecast period
Mobile commerce is expanding rapidly across the globe due to increase in online purchases and increasing use of smartphones. Majority of consumers are increasingly preferring mobile commerce over conventional commerce. Near field, connectivity plays mobile commerce. Hence, these factors are expected to propel the global near field communication market growth over the forecast period.
Global Near Field Communication Market: Opportunities
Retail applications replacing card payment with payment via NFC-enabled mobile phones can present lucrative growth opportunities in the global near field communication market
E-commerce has changed the consumer experience in the retail industry substantially. However, almost 95% of transactions in retail still take place in the brick and mortar atmosphere. NFC-shopping offers a blend of efficient management of information and the physical shop environment that is preferred by most shoppers. NFC-shopping is revolutionizing the shopping experience of shoppers by offering individualized information to shoppers at the place of purchase. NFC-enabled phones can be used in a retail store and detailed information about the product price, calories it contains, and comparison with other similar products that can be received on a mobile phone.
Research and development activities among market players can provide major business opportunities in the global near field communication market
Key players operating in the market are focused on research and development activities, in order to enhance the market presence. For instance, in January 2014, DeviceFidelity launched Isis Ready NFC cases for iPhone users. With Isis Mobile Wallet iOS app and Isis NFC case, iPhone users can use NFC technology. Furthermore, in June 2014, Gemalto launched connected car solutions, with features such as high-speed mobile connectivity, advanced GPS, and eCall capabilities for security.
|Base Year:||2020||Market Size in 2021:||US$ 22,282.8 Mn|
|Historical Data for:||2017 to 2020||Forecast Period:||2021 to 2028|
|Forecast Period 2021 to 2028 CAGR:||16.4%||2028 Value Projection:||US$ 64,783.9 Mn|
Broadcom Corporation, On Track Innovations (OTI) Ltd., DeviceFidelity, Inc., Identive Group, Inc., Gemalto N.V., NXP Semiconductors N.V., Visa, Inc., Samsung Electronics Co. Ltd., Toshiba Corporation, and ST Microelectronics N.V.
|Restraints & Challenges:||
Integration IoT with NFC is a major trend
NFC tags have been increasingly used in various Internet of Things (IoT) applications. In May 2014, Thinfilm Electronics ASA demonstrated NFC-enabled labels that include a temperature sensor. This can be used for product tracking through the product’s journey from the manufacturing site to stores. The device can report whether at any point the product exceeded a particular temperature threshold. This technology can be particularly interesting for consumer electronics products that often face heating problems. The heating problem can be reported to the manufacturer without the need for user intervention.
Partnerships and collaborations activities is another key trend
Major market companies are involved in partnerships and collaborations, in order to enhance the market presence. For instance, in February 2012, DeviceFidelity partnered with Datacard Group, according to which Datacard Group had an equity investment in DeviceFidelity.
Figure 2. Global Near Field Communication Market Share, By Product Type, 2020
Key Takeaways of the Graph:
Global Near Field Communication Market: Restraints
Concerns regarding security and short-range related to NFC are expected to restrain growth of the global near field communication market during the forecast period
Security threat and privacy concerns are some of the major concerns regarding NFC technology. Threat of eavesdropping by an unwanted external source is a major concern in NFC. Various threats for NFC include the threat of data modification, data insertion, and data corruption attacks. As NFC is wireless communication technology and uses radio waves, any third party can use an antenna for receiving the transmitted signals and in some cases modify the data. Personal information, credit cards, and sensitive data that are stored on NFC-enabled devices may turn out to be the primary targets for cyber-criminals and hackers. Thus, these factors are expected to restrain growth of the global near field communication market during the forecast period.
Intense competition from alternative technologies is expected to hinder the global near field communication market growth over the forecast period
NFC is facing intense competition from alternative methods such as digital wallet, digital cash, and similar functions. Moreover, NFC faces strong competition from card companies, handset manufacturers, and operators. Square accessory offers competition to NFC-enabled devices, as this accessory can convert almost all Android based smartphones into a credit card reader. The Square accessory can be plugged into the accessory jack in the smartphone to convert it into credit card readers, linking Square with the phone which manages the transaction. Therefore, these factors are expected to hinder the global near field communication market growth in the near future.
Global Near Field Communication Market: Competitive Landscape
Key players operating the global near field communication market are Broadcom Corporation, On Track Innovations (OTI) Ltd., DeviceFidelity, Inc., Identive Group, Inc., Gemalto N.V., NXP Semiconductors N.V., Visa, Inc., Samsung Electronics Co. Ltd., Toshiba Corporation, and ST Microelectronics N.V.
Global Near Field Communication Market: Key Developments
Major companies are focused on product launches, in order to expand the product portfolio. For instance, in January 2020, NXP Semiconductors N.V. launched new Bluetooth Microcontroller intelligence with value-added NFC peripheral.
Key players are involved in product development, in order to gain a competitive edge in the market. For instance, in October 2019, ST Microelectronics N.V. launched enhanced Core NFC Framework experience of new iOS 13 platform.
Near field communication (NFC) is simply a set of transceivers that are used for communication between electronic equipment over a short to medium distance. A typical application of near-field communications would include vehicle navigation systems, allowing a car to communicate with a nearby vehicle or even with an orbiting satellite. In fact, some of the most popular smartphone applications now incorporate this technology into their devices to enable voice navigation, controls over braking and acceleration as well as making calls on the move. In addition, as mentioned above, many of today's most popular mobile devices, like the iPhone and Android, make use of this type of connectivity to allow users to make hands-free calls wherever they are.
Launch of solutions that support NFC is expected to propel growth of the global near field communication market over the forecast period. For instance, in July 2019, GET Group North America, a developer of mobile ID technology, announced that its GET Mobile ID Digital Identity Solution for iOS can support NFC for identity transactions at Point of Sale (POS), airports, and even kiosks.
Major players in the global near field communication market are focused on adopting partnership and collaboration strategies to enhance their market share. For instance, in February 2019, Broadcom Inc. announced that Barclays signed a strategic agreement as a Portfolio License Agreement (PLA) customer to help support a multi-year, cross-organizational initiative to streamline its IT operations, while reducing complexity and cost.
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