NFC-enabled mobile phones: the disruptive innovation you should know about

HTC One X, AT&T’s newest Android LTE phone, was released on May 6th. This phone is special because it is Near Field Communication (NFC) enabled. The NFC-enabled phones will tremendously change the mobile customer experience. Why? I will explain in plain English what NFC is and how it will create new businesses.

Most of us are familiar with Radio Frequency Identification (RFID) tags. They are the tags that make the alarm sound when the sales rep forgets to remove the smart label from the item purchased. Stores use it to prevent theft. NFC is built upon RFID technology. NFC enables consumers to tap their business phones to share information, to connect, and to make payments. Why does tapping work? Because NFC enables a short-range wireless connectivity to allow communications at distances up to 10 cm.

NFC-enabled phones will disrupt the current mobile market. Not only can the NFC phone do Peer-to-Peer (P2P) communication easily, but it can also read information from an NFC tag. Using mobile app marketing as an example, when a developer embeds an app in an NFC tag and places the tag in a poster, people walking by the poster can download the app using their NFC-enabled phone. Therefore, developers will have more freedom to make their apps visible and accessible. They don’t have to count on app stores to distribute their apps. The same promotions can be used for other types of marketing campaigns. Therefore, NFC is a disruptive innovation that creates a new market and new business opportunities.

The simplicity, instant interaction and quick transaction capability make NFC technology attractive, especially to the Millennial generation that tends to want to get things “now,” get work done instantly, and is very comfortable with using mobile devices.

Forrester reported that handset manufacturers see 2012 as the year that NFC achieves relevance as it increases to a total of 80 million addressable handsets, up from 35 million units shipped in 2011.

Disruptive innovation creates new business opportunities and NFC-enabled phones are an example. Have you taken advantage of NFC yet?