But they didn't

Sept. 18, 2012 | by Steven Gurley

It’s official. The iPhone 5 is out. How do I feel about it? Not good.

First, let me say that the iPhone 5 appears to be a masterpiece of engineering excellence. It packs more features and functions in a smaller, more elegant package than anything before it or anything likely to come along in the near future. The fit and finish appear to be amazing and, like many of Apple’s products, its physical characteristics are an absolute work of art. Frankly, it takes the packaging of mobile communications and device aesthetics to a new level. But if it’s so great, why am I not happy?

I’m not happy because Apple has offered up nothing to change the world, which is the one thing we’ve come to expect from this company. Rather than give us something that could make a difference, they’ve given us the technological equivalent of a beautiful woman who thinks of no one but herself. Great to look at but doesn’t necessarily make you or anyone else better for the association.

When Apple released the first iPhone, it radically changed what a phone should do and how it should do it. When they released the app store and integrated it into the iTunes ecosystem, they created a platform that enabled world-changing innovation that literally altered peoples’ lives. When they created the iPad, they fundamentally changed the way people learned, recreated and consumed content.

When Apple created the iPhone 5, they had the opportunity to yet once again do something revolutionary, something to change the world, something to make an impact on everyone’s lives, but they didn’t. So what could they have done?

At a minimum, Apple could have introduced an NFC-equipped iPhone. That in itself wouldn’t have been revolutionary, but the services and capabilities they could have created and enabled via NFC could have been revolutionary. The market leadership that they could have demonstrated could have been amazing. The new businesses that they could have enabled and the new services they could have inspired could have been revolutionary. But they didn’t.

So why didn’t they? Very few know for sure, but I have heard a lot of speculation on the topic. First, I heard that they had trouble integrating the NFC chipset into the new, smaller form factor. Second, I heard that they weren’t comfortable with the current state of NFC technologies. Third, I heard that the wireless carriers were an impediment to supporting NFC. Finally, I heard that NFC is a threat to their own economic well-being.

The talk surrounding the final point intrigues me the most. The talk I’ve heard goes something like this: Apple makes billions of dollars off the app store. NFC would provide a way for consumers to, with just a tap of their smartphone, easily obtain content from any physical object. Much of this content would likely be bound within an HTML5 wrapper.

Since HTML5-driven content would provide many of the usability features/functions heretofore only available via a native app, the talk is that NFC-delivered content would diminish the value of native apps. This would, therefore, decrease the value of Apple’s app store and along with it the app store’s revenue. The talk is that this is a model that Apple does not want to perpetuate; therefore, the decision was clear: No NFC in the new iPhone.

Whatever the reason, Apple may ultimately find that their decision to not integrate NFC into the iPhone 5 was a bad one. I think companies like Google and Samsung, Microsoft and Nokia could easily capitalize on Apple’s poor decision by supporting NFC-enabled experiences that benefit developers, businesses and consumers alike. When consumers find that Apple cannot support theses new experiences, the other device manufacturers, and the creators of their supporting operating systems, will win and Apple will lose.

In summary, I think Apple had an opportunity to greatly extend their persona as a thought leader and world changer, but they didn’t.

Topics: Contactless / NFC , Handsets / Devices , Mobile Payments , Trends / Statistics

Steven Gurley / Steve Gurley is broadly recognized as an industry expert and thought-leader in mobile and mobile content management solutions. He is a widely published author of numerous papers, articles and blogs on mobility and serves on numerous mobile advisory boards and committees, including serving as the current chairman of the Digital Screenmedia Association's committee on mobile. Steve is currently the President and CEO of Pyrim Technologies, a mobile business and new market development company.
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