Will Apple ever release an iPhone with NFC support?

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Another year, another new iPhone… and still no support for Near Field Communications. Apple (NASDAQ:AAPL) finally took the wraps off its long-awaited iPhone 5 on Wednesday, and for all the bells and whistles the computing giant managed to squeeze into the supermodel-thin smartphone, NFC and mobile payments capabilities were conspicuously absent. Rival mobile operating systems including Google's (NASDAQ:GOOG) Android and Research In Motion's (NASDAQ:RIMM) BlackBerry already support NFC, of course. Microsoft's (NASDAQ:MSFT) forthcoming Windows Phone 8 will introduce NFC capabilities as well. But the iPhone--the device by which all others are judged--continues to shun the technology like the plague.

iPhone 5

Click here for complete coverage of the iPhone 5.

We've seen this movie before, of course. Apple was widely expected to roll out NFC support with the previous iPhone 4S, introduced in 2011, but that speculation failed to pan out. This summer, The Wall Street Journal reported that Apple executives and engineers did indeed debate the company's entrance into the mobile payments space last year, mulling whether to create a new service that would embed various payment methods into iOS devices or instead build a payment network of its own. Scott Forstall, Apple's head of iPhone software, even assigned members of his team to work on a comprehensive wallet application, while hardware staffers investigated contactless technologies including NFC and Bluetooth. But lingering questions over security, payment processing and retailer adoption scuttled the project. During an executive review, Apple CFO Peter Oppenheimer even asked if there is a newer, web-based technology more secure than NFC.

That didn't stop the NFC speculation from returning with a vengeance this summer after Apple announced Passbook, a new iOS 6 app that stores and updates boarding passes, retailer loyalty cards, movie ticket apps and related consumer information and documents. It seemed a forgone conclusion that Passbook would grow to add complementary mobile payments as well, and during Apple's most recent earnings call, CEO Tim Cook further fanned the flames by stating Passbook is a "very key feature" in iOS, but declined to elaborate.

The rumors reached a crescendo late last month when photos allegedly depicting the front assembly of the iPhone 5 surfaced online: While consistent with previous images, the photos also included what appeared to be an NFC chip located adjacent to the smartphone's front-facing camera. Hell, SCVNGR, the startup behind the LevelUp payment app, even introduced new NFC-enabled hardware in anticipation of the iPhone 5 adding NFC support.

So what happened? The smart money says those aforementioned security, processing and adoption concerns still linger. Isis, the NFC-based nationwide mobile payments network spearheaded by Verizon Wireless (NYSE:VZ), AT&T Mobility (NYSE:T) and T-Mobile USA, still hasn't gotten off the ground, while rival Google Wallet is supported on only a handful of Android smartphones offered by Sprint Nextel (NYSE:S). Standardization and interoperability remain huge question marks as well: Just last month, Google, PayPal, the Isis triumvirate and Sprint joined forces as the Mobile Payments Committee, an effort to tackle those challenges as well as regulation and public policy, and merchant and consumer education.

There are no guarantees NFC will even win as the mobile payment technology of choice, for that matter. Square users are processing more than $6 billion in payments on an annualized basis by sliding credit and debit cards through a dongle that attaches into a smartphone's audio jack--dongles that Apple stores sell, it's worth pointing out. PayPal offers proprietary mobile wallet services at national chains including Home Depot, Abercrombie & Fitch and Jos. A. Bank, not to mention a Square-like product of its own dubbed PayPal Here. And more than a dozen leading U.S. merchants including Walmart, Target and Best Buy will create their own nationwide m-commerce network, further muddying the waters.

That leaves Apple on the NFC sidelines. It's beginning to look like the company will stay there indefinitely. Because if Apple didn't embrace NFC now, then when? Apple famously refused to support Adobe Flash on iOS too, and look how that turned out: 400 million iOS devices sold to date, and Flash on life support. Apple will continue doing just fine without NFC support. But NFC without Apple's support is a far more problematic proposition.

P.S. For complete coverage of the iPhone 5 launch and the market's reaction, make sure to check out our special report page: Apple's iPhone 5: Complete coverage--Jason

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