Microsoft Corp. appears to be gunning to increase its relatively low profile in smartphones by beating Apple Inc. in announcing an NFC-based mobile wallet.
The computer giant's new Windows Phone 8 mobile operating system due out this fall will include Near Field Communication technology and a wallet for storing software-based membership cards and tickets, according to various reports from technology insiders. Microsoft presented its new operating system to developers on June 20 in San Francisco.
The Windows 8's wallet will harness secure elements on the SIM for mobile operators that support it, according to Microsoft. The NFC chip will also allow Windows Phone owners to share documents, contacts and photos.
Microsoft's move could help propel development of NFC-enabled payment at the point of sale through smartphones, reviving hope that NFC may serve as a core technology after all for mobile payments, after languishing for the lack of NFC-enabled devices.
The slowdown has raised doubts about whether other emerging technologies might supplant NFC before it takes hold broadly with consumers.
Google Inc. supports an NFC-based mobile wallet, but a year after the wallet's launch only a handful of Android smartphones have the necessary hardware to make a payment.
Microsoft's wallet could add much-needed momentum to NFC payment technology in the U.S.
"The fact that NFC is being enabled in new devices coming out in the market is really important at this point," Beth Robertson, a senior analyst with Javelin Strategy & Research, says. "It's could really help jump-start the whole mobile-payments arena."
Rumors have swirled for more years that Apple was poised to unveil an NFC-based phone, but so far the Cupertino, Calif.-based company has failed to deliver it, despite filing extensive patents touching on NFC.
Apple on June 11 unveiled a software-based mobile wallet called Passbook, which uses bar codes to represent consumers' loyalty cards and tickets on an iPhone's screen.
Apple may be biding its time to see how NFC is received before making a big commitment to it, experts say.
"Apple has been viewed as a real innovator in technology with the iPhone and the iPad, and because they have so many patents on record, they are very carefully watched as a market innovator," Robertson says.
Microsoft's move could also mean mobile payment technology may be tilting more heavily toward NFC in the near future, rather than toward two-dimensional bar code technology that has been gradually gaining favor in the absence of NFC devices.
"The more NFC devices that enter the market, the less likely it is that bar code technology will survive as a competitive option," Robertson says. "The bar codes approach was starting to get well established when there were no other options."
But Microsoft's relatively paltry 7% share of the U.S. smartphone market means its NFC rollout will have less effect than a similar move by Apple would.
Google's Android operating system leads the smartphone market at 41%, followed by iPhone with 32%, Research in Motion's BlackBerry with 14% and the remainder divided among smaller companies, Mary Monahan, Javelin's research director for mobile, says.
"When you consider that Windows accounts for about 17 million devices and Apple has more than 100 million devices, it is clear Microsoft won't have the same market effect with an NFC device," Monahan says. "But Windows is clearly looking to grab the opportunity here to among the first with NFC, and with that they are positioning their new operating system to be more competitive."