2. This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2011 Gartner, Inc. and/or its affiliates. All rights reserved. Mark Hung Research Director NFC: The Path from Hope to Reality

3. 1

4. Key Issues What are the current roadblocks? What are the key markers to watch? How are the industry players positioned? 2

5. Roadblock #1 3

6. Roadblock #2 – Fixation on Payments The Triad – Banks, Carriers, Platform Providers Infrastructure – Merchants Year of the Wallet 4

7. N = 3,032 Wallet Provider Interest vs. Perception

8. NFC Payment – Positive Developments Pew Internet Project -10%: used mobile phone to make charitable donation by texting -33%: used smartphone to do online banking -46%: purchased an app -65%: “By 2020, most people will have embraced and fully adopted the use of smart-device swiping for purchases they make, nearly eliminating the need for cash or credit cards.” Starbucks payment app -26 million payments processed in first 11 months -15 million payments processed in following 4 months EMV: Visa and MasterCard 6

9. Roadblock #3 – Where’s the Killer App? 7

10. Key Issues What are the current roadblocks? What are the key markers to watch? How are the industry players positioned? 8

11. 9 DOOH!

12. Marker #1: Mobile Marketing DOOH 10 Attract Engage Educate Purchase

13. Marker #1: Mobile Marketing QR Code – The Gateway Drug 11

14. Marker #2: Device Pairing 12

15. Marker #3: Authentication Physical access -Residential: Yale/Assa Abloy -Commercial: HID Global -Hospitality: Openways Computing: Intel Online: Intel and MasterCard 13

16. Marker #4: Transportation Public Transit -Bay Area: BART -New York: MTA -U.S.: Salt Lake City, Philadelphia, Boston -Asia: Japan, Singapore, China Parking -San Francisco’s metered street-side parking 14

17. Key Issues What are the current roadblocks? What are the key markers to watch? How are the industry players positioned? 15

18. The Path to Reality 16 Enable the Technology for Mass Adoption

19. Enable the Technology for Mass Adoption  Semiconductor Vendors Current cost too high: total system implementation cost is higher than the most common wireless connectivity functions…combined Recent Developments -NXP’s new antenna optimizing chip -Broadcom’s 40nm chip -TI’s 5-in-1 combo -Kovio’s printed silicon tag 17

20. The Path to Reality 18 Enable the Technology for Mass Adoption

21. Increase the Attach Rate of NFC  Handset OEMs Platforms Hero devices -Galaxy S III -Galaxy Nexus -HTC One X -Nokia PureView 808 -Blackberry Bold Continue on the current path, and start driving it to mid-range phones 19

22. The Path to Reality 20 Increase the Attach Rate of NFC Enable the Technology for Mass Adoption Expand NFC to Other Platforms

23. Expand NFC to Other Platforms  Computing and Consumer Electronics The sum is greater than the parts Recent Developments -Tablet: B&N Nook, Sharp, Samsung Galaxy Note -PC: Ultrabook -TV: MobiSocial, Nokia Play -Set-top Box and Wireless Routers 21

24. The Path to Reality 22 Increase the Attach Rate of NFC Enable the Technology for Mass Adoption Expand NFC to Other Platforms Create a Platform- Independent Solution

25. Create a Platform Independent Solution  OS Providers Interoperability is key Current Issues -Inability to share -Tag confusion 23

26. Tag Confusion NFC Forum Type 1 -Topaz NFC Forum Type 2 -Mifare Ultralight -NTAG 203 NFC Forum Type 3 -Felica RCS 965 NFC NFC Forum Type 4 -Mifare DESfire EV1 4k Type 2 Compatible -Mifare Classic 1k -Mifare Classic 4k NFC-V / ISO 15693 -NXP SLI Web link (smart poster) -NTAG 203 Web link (URI) -Mifare Ultralight Phone call (URI) -Mifare Ultralight SMS (smart poster) -Mifare Ultralight E-mail (URI) -Mifare Ultralight vCard / Business Card -NTAG 203 Text RTD -Mifare Ultralight 24

27. The Path to Reality 25

28. The Path Does NOT Include… Service providers (e.g., banks) Carriers Merchants 26

29. NFC Market Adoption 27 NFC Volume

30. Where Do We Go from Here? 28 “And no, we don’t know where it will lead. We just know there’s something much bigger than any of us here.”

31. 29

32. This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2011 Gartner, Inc. and/or its affiliates. All rights reserved. Mark Hung Research Director NFC: The Path from Hope to Reality