Why NFC tags will not replace the barcode: Lack of NFC capable devices

Today we’re going to continue our latest blog series on why NFC tags will never replace the barcode by taking a look at the number of NFC-capable devices currently availabe on the market. We argue that there are far too few NFC-capable devices to make a case for replacing the barcode.

Just a few days ago Comscore reported the U.S. mobile subscriber market share for April 2012, which had Android climbing 2.2 points to 50.8% of all smartphone subscribers (US only) while iOS rose 1.9 points to 31.4% of the market (see figure 1). The report also noted that 107 million people in the U.S. currently own smartphones. According to Google there are currently 232 Android mobile devices on the market. In looking at NFC World’s comprehensive market overview of available NFC-enabled devices we found that only 27 of these 232 Android devices are NFC-capable (see Figure 1).

We were curious how many people are actually using these devices so we analyzed some recent logs from our own Barcode Scanner & Comparison Shopper app. We looked at the top 125 Android devices using our app (95% of all used) since the beginning of 2012 and found only 8.6% of these devices (see Figure 2) to be NFC-capable. We’ve also created an “unidentified” category for devices below our 125 top devices or for those we couldn’t analyze, which comprised 10.7% of the phones in our logs. Using our app as a proxy for the broader market, these findings indicate that at least 44 million of the overall 54 million Android users in US lack NFC-capable phones (see Comscore report). If you add the 35 million iOS users to this total and assume that the distribution of NFC phones on Android is similar to RIM, Windows and Symbian devices, we can conclude that over 97 million smartphone users in the US do not have NFC capabilities.

With this kind of market share NFC cannot hope to become a standard for interacting with products in the short term. Barcodes have a great advantage here since almost all smartphone devices have a camera capable of reading a barcode. It’s reasonable to assume that over time NFC could become a standard checkout mechanism for mobile payment use cases (not for product identification), but the lack of capable devices will bottleneck this process. And even if Apple releases NFC capabilities on the IPhone 5, many iOS users will still use older devices and, more importantly, as argued in our previous post, putting NFC tags on individual products is not economically feasible.

Stay tuned for our next and final post in this series, which looks at the user experience of NFC vs. barcodes!