Bloomberg has an interesting report tonight, but they have the headline all wrong. Apple Plans Service That Lets IPhone Users Pay With Handsets — is technically correct (assuming the report is true, of course), but it completely downplays the potential ramifications of what Apple is apparently attempting to do. If Apple can nail Near-Field Communication (NFC) and tie it directly into their already-established iTunes payment system. It could change everything. It could transform Apple from the biggest technology company in the world, to the biggest company in the world, period. By far.
Granted, that’s a very big “if” in the above statement. And there are many unknowns from this report, which I’m simply extrapolating out. But there’s also a lot that makes sense, if you think about it.
First of all, Bloomberg’s Olga Kharif reports that Apple will build NFC chips into the next iteration of the iPhone. That should be absolutely no surprise — in fact, we reported on it months ago. Plus, given that rival Google has already done this for the Nexus S Android device, it has gone from a no-brainer to a must-do.
What is somewhat surprising is first of all that the report only mentions the new iPhone “for AT&T” and not Verizon. And secondly, that NFC is said to be built into the iPad 2 as well.
It’s hard to know what to make about the former. Perhaps that’s just a slip up? Or maybe AT&T really will get the iPhone 5 first?
The iPad 2 talk is conceivably more straightforward. Typically, NFC is associated with mobile payments, but don’t forget that it can also be used for a host of other short-distance data communications. In fact, it could well be that NFC becomes a staple of most Apple products for beaming information instantaneously and securely over a short distance. Things like photos, movies, etc. Also, imagine if the iPad is in your bag or purse, it could certainly still be useful when it comes to paying for things by sending a signal to a receiver a few inches away.
But the key to this is really iTunes. Or more specifically, the payment system within iTunes that is already in use by millions and millions of people around the world.