Updated: Juniper slashes NFC retail forecast by $70B, blames Apple for slow adoption


Juniper Research is scaling back its expectations for the global Near Field Communications retail transactions market by $70 billion, contending that Apple's (NASDAQ:AAPL) decision to omit an NFC chipset from its new iPhone 5 has undermined retailer and brand confidence in the mobile payment technology.

According to a Juniper forecast issued in July 2012, NFC-enabled mobile retail payments appeared on track to exceed $180 billion by 2017, a seven-fold increase over 2012. However, Juniper's forecast was issued roughly six weeks before Apple unveiled the iPhone 5, which does not offer NFC support. Without Apple's explicit endorsement of the NFC standard, Juniper has now slashed projected growth to $110 billion by 2017, indicating Apple's reluctance to embrace the technology is leading to reductions in both point-of-sale rollouts and consumer awareness that threaten a cycle of "NFC indifference" during the next several years.

"While many vendors have introduced NFC-enabled smartphones, Apple's decision is a significant blow for the technology, particularly given its previous successes in educating the wider public about new mobile services" said Juniper report author Windsor Holden. "Without their support, it will be even more difficult to persuade consumers--and retailers--to embrace what amounts to a wholly new means of payment."

Juniper now expects NFC transaction values in the North American and Western European markets will suffer a "two-year lag" resulting from delayed retailer investments in POS equipment. The firm also anticipates that the U.S. NFC retail market will experience negative effects connected to slower-than-expected adoption of the Google (NASDAQ:GOOG) Wallet tap-and-pay service as well as the delayed launch of Isis--spearheaded by Verizon Wireless (NYSE:VZ), AT&T Mobility (NYSE:T) and T-Mobile USA--which began consumer trials in Austin, Texas and Salt Lake City in late October.

Despite the revised forecast, Juniper notes that NFC trial deployments have generated positive consumer feedback across multiple segments of the globe, "suggesting strong latent interest when services are more widely deployed." The firm also cites MasterCard and Visa's ongoing efforts to certify NFC services and data centers as reasons for optimism.

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This story was updated to say that Juniper scaled back its expectations for global Near Field Communications retail transactions market by $70 billion, not $70 million.