No NFC for the iPhone 5, says Apple

Following a report of Apple meeting with several UK wireless operators, sources have disclosed that Apple’s anticipated iPhone 5 will not include NFC technology, stating concerns of a lack of clear standards across the industry.

This wouldn’t be the first time that Apple has shown its hesitance in adding new features to its product range. It took years for the company to include a front facing camera, essentially developing FaceTime as a compelling reason to do so. Apple also failed to include the anticipated NFC technology on the iPad 2 and despite early rumours around Apple developing its own iTunes solution for mobile NFC payments, don’t expect to see an NFC compliant iPhone until, perhaps, 2012.

Near field communication, the set of short range wireless technologies has been the smartphone feature buzz for a while now with Google voicing its support for the new wireless communications system on its Android 2.3 Gingerbread update in 2010. The Samsung Galaxy S II and the Samsung Nexus S are two Android devices with NFC technology built in which essentially allows for payments over a short range using your mobile phone. In a Bloomberg report yesterday, Google (GOOG) announced that it would be testing its NFC payment system in the next four months within the New York and San Francisco areas, following payment and installation of thousands of special cash register systems from Verifone Systems Inc. (PAY).

With Apple putting the NFC hardware on hold, Google may have a solid window with which to build on the existing infrastructure bearing in mind that while NFC payment systems are new to Western markets, they have been deployed and in-place on the Asian front for a well over a decade, particularly in Japan.

Typically requiring a distance of 4cm or less, NFC operates at the globally available and unlicensed 13.56 MHz radio frequency band with supported data rates ranging from 106 to 848 k bit/s. An NFC ‘initiator’ such as a mobile phone generates a short-range RF field to passive targets such as tags, stickers, fobs and cards for ‘passive communication’ or, alternatively, both the initiator and target devices engage in ‘active communication’ by generating their own RF fields.

The benefits of NFC powered devices are many, ranging from contactless card emulation to interactive advertising and P2P communications. Current applications include mobile ticketing systems for public transport such as the Mifare ORCA card – an NFC powered smartcard for the Seattle/ Washington transit system. Eagerly, the most anticipated use for NFC is within the mobile payment infrastructure in which an NFC device acts as a credit card, allowing users to make payments by holding their mobile phones close to a payment interface, essentially stripping out the need for physical contact with credit card machines.

NFC tech is not without security concerns despite the communication range being limited to a few centimetres. The RF signal for wireless data transfer can be picked up by eavesdroppers using antennae. Of course the distance for which an attacker could intercept the frequency would depend on several parameters (such as the proximity of the attacker to the user) but the ability to eavesdrop is still there. There is also the possibility of data modification, data destruction through signal jamming and relay attacks.

Given the lack of standards, security concerns and that NFC is still in its infancy in western markets and somewhat underutilised, Apple’s stance on implementing the early technology is understandable. That isn’t to say that the company have given it a complete miss however as inside sources say that Apple has hired several NFC experts and have published a series of patent applications relating to the technology. One such patent details how the iPhone could be used to pay for bills at restaurants. Apple clearly hasn’t dismissed NFC altogether – In true Apple style, they simply want to get it perfectly right.