The global near field communication (NFC) market is estimated to create an absolute dollar opportunity of US$ 19 Bn by the end of 2022. The sales of NFC are expected to reach US$ 44.7 Bn by 2032, exhibiting growth at a CAGR of 15% over the forecast period 2022-2032. The market is anticipated to be driven by increasing application across automotive and contactless payment sectors.
NFC is a wireless technology used for short-range wireless communication techniques allowing devices to share information within a proximity of 4cm or less. NFC technology allows to share small payloads of data or initiate a connection between two Android-powered devices or between NFC tag and Android-powered devices.
In this wireless technology, radio communication is established between devices by bringing them into required proximity or touching them simultaneously. Attributed to this, NFC is increasingly gaining popularity as an effective alternative to other short-range communication technologies such as Wifi and Bluetooth.
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Which are Some Prominent Drivers Spearheading NFC Market Growth?
NFC technology is gaining huge traction owing to its numerous advantages such as versatility, safety, convenience. The technology is much more safe and secure for transaction in comparison to other payment solution as they require a PIN or does not offer physical access of credit or debit card information to retailers.
On account of this, the NFC technology is finding a wide range of applications such as information sharing, contactless payments, providing authentication, and information reading from smart posters among others. This is expected to augment the growth in the NFC market.
In addition, increasing penetration of the internet has led to a significant rise in sales of smartphones, tablets, laptops, and others. For instance, according to a study by the GSM Association, around 323 Mn people in North America are reported to be using smartphones, accounting for nearly 81% of the region’s population in 2020. As NFC technology is increasingly being incorporated in novel smartphones, growing sales of these devices are expected to fuel the demand in the market.
What are the Challenges Faced by the NFC Market?
NFC technology needs installing numerous hardware, software, and constants maintenance for providing seamless & error-free wireless transactions to customers, which is highly expensive for small and medium size enterprises and retailers.
Increasing customer inclination towards adopting alternative wireless payment solutions such as UPI, QR scans payments, and online payment getaways are posing challenges for the growth in the NFC market.
In addition, inability to work in more than 12cm distances and offer low data transfer rates, and extravagant costs of NFC-enabled devices, as compared to Bluetooth and Wifi, are factors hindering the sales in the market.
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How is North America Contributing to Growth of the NFC Market?
Future Market Insights reveals that North America is anticipated to account for the lion’s share in the global NFC market between 2022 and 2032.
A significant rise in sales of automotive vehicles such as passenger cars and commercial vehicles is being witnessed across the U.S and Canada resulting in creating strong demand for associated technologies. For instance, according to the Bureau to Transportation Statistics, approximately 3.54 Mn units of passenger cars and 10.33 Mn units of commercial vehicles were reported to be sold across the U.S. alone in 2019.
As innovative technologies such as NFC are increasingly being used in infotainment systems which are incorporated in novel automobiles, this rise in sales of automobiles is expected to create lucrative growth opportunities in the market.
Also, growing penetration of smartphones and increasing adoption of smart cameras, owing to surging trend of photography among millennials is favoring the demand for wireless data transfers technologies such as NFC in the North America market.
Why is Asia Pacific Excluding Japan Emerging as an Opportunistic NFC Market?
As per FMI, Asia Pacific excluding Japan is projected to emerge as a highly remunerative NFC market over the forecast period 2022-2032.
Surging mobile penetration with improved data connectivity and payment infrastructure is presenting a potential opportunity for the growth of NFC-enabled mobile payment. As the trend of cashless payment continues to create deeper inroads, businesses in the emerging markets, such as China, India, Malaysia, and others are localizing content for mobile platforms for maximizing their sales.
Thus, numerous innovative technology providers are entering into collaboration with payment solution providers to launch novel products integrated with NFC technologies. For instance, in 2021, Xiaomi, a Chinese wearable device manufacturer, announced joining hands with Mastercard for developing and launching a new MI Smart Band 4 NFC with an advanced contactless payment feature. A multiplicity of such product launches are expected to augment the growth in the Asia Pacific excluding Japan market.
Market Competition
Some of the leading players in the near field communication market are Gemalto N.V., DeviceFidelity, Inc., Visa Inc., Broadcom, Inc., STMicroelectronics N.V., Toshiba Corp., Samsung Electronics Co. Ltd., Identive Group, Inc., NXP Semiconductor, Infineon Technology, and On Track Innovation Ltd.
Attributed to the presence of such high number of participants and growing research and developments (R&D) activities for innovation in NFC technology, the market is highly competiti
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Future Market Insights (ESOMAR certified market research organization and a member of Greater New York Chamber of Commerce) provides in-depth insights into governing factors elevating the demand in the market. It discloses opportunities that will favor the market growth in various segments on the basis of Source, Application, Sales Channel and End Use over the next 10-years.
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