on its way out, in which case, paying for groceries or goods at
your local store will never be the same. Imagine your salesperson
at the department store, waiter at your favorite restaurant, or
clerk at the grocery asking you the above question at check out.
You won't have to imagine for much longer as technology via near
field communications ((NCF)) is coming to a store near you. NCF
technology is intended mainly for use in mobile phones, though
there are several specific uses at present. One is card emulation
in which the NFC device mimics an existing contact-less card. There
is also a reader mode. In which the NFC device is active and reads
a Radio Frequency Identification Device. This is now used in
applications such interactive advertising . In addition, two NCF
devices can communicate directly with each other and actually
exchange information, in what is called P2P mode.
The future of applications built upon this technology is
encouraging and could lead to a boon of revenue streams for
early-in companies. Think outdoor billboards and posters, mobile
ticketing in movie theaters, airports, and of course
debit-credit payment card systems at retail environments. No more
magnetic card swipes, license ID's etc. NFC can be used to
configure and initiate other wireless network connections such as
Bluetooth, Wi-Fi or Ultra-wideband. Your smart mobile phone can
sync directly with the merchants system using NCF technology.
More than one method
As with the current multiple credit card systems, there will
most likely be multiple payment method devices offered. Big players
include EBay Inc.'s (
) PayPal, and the ISIS system, which is managed by AT&T (
) and Verizon Wireless (
). ISIS will process payments via Discover Financial Services (
Enter Google (
). Their plan is to start testing a mobile-payment service at
stores within the 2011 year using its Android mobile phone
operating system as a basis. Rumored target areas are NYC, and
perhaps San Francisco. The testing will reportedly enable consumers
to pay for their purchases with mobile phones equipped with NCF
technology using specially-configured cash-register systems from
VeriFone Systems Inc. (PAY) at merchant locations. A host of
database information including financial account information,
coupons, store discount cards etc. is also reportedly going to
So what technology firms may benefit the most from the
adaptation of NCF technology?
Some companies (mentioned may develop a transaction-based
business model in which they receive a percentage or fee from each
transaction, such as that with a merchant credit card processing
account. Other potential beneficiaries are the equipment suppliers
for the merchant's cash registers, and phone manufacturers as each
unit will have to incorporate the new technology into them. This is
seen as a must-do in order to just stay competitive with other
Samsung Electronics (SSNLF.PK) currently markets their Nexus S
phone, which allows for NFC capabilities and transactions. Nokia
Oyj (NOK) and Research In Motion Ltd. (RIMM) reportedly have
products in the pipeline with NFC-enabled technology.
On the patent side of things, Via Licensing Corporation, an
independent subsidiary of Dolby Laboratories (DLB), is developing a
patent licensing program for NFC technology.
Google is currently trading at 561.00 range with a 52-week range
of 433.63 - 642.96. Their revenue stream is so vast that their
involvement in the NCF technology may not even register a blip on
their revenues for some time, but a long position on them could
benefit an investor.
AT&T is a long shot. Currently trading at nearly 28.00 it's
typically not a real mover. With a 52-week Range of 23.78 - 30.10,
short term gains are not likely, even with a news disclosure of
significant payment processing deal with RCF technology. Their loss
of an exclusive arrangement with Apple for the iPhone was a blow,
despite AT&T CEO Randall Stephenson's comments on the industry
is better off with more than one supplier involved. Given that they
have one of the lowest approval ratings of cellular service in the
U.S., many think they are in denial.
Verizon Communications Inc. could be a long term beneficiary of
implementation of this technology. At 35.00 at current, and a 52wk
Range of 25.99 - 37.70 an argument could be made that they are
heading in the right direction on many fronts and long-term results
could be positive.
Nokia Corporation (NOK) could be positioned in a very positive
way to benefit if their product materializes. Currently at 8.00, on
the low end of a 52wk Range of 7.73 - 15.89, ground can easily be
made up and investors can profit accordingly.
Boston-based Strategy Analytics is reporting that Apple (AAPL),
Nokia and RIM together generated 64 percent of the revenue in the
popular and ever-growing smart phone market.
The report by Strategy Analytics indicates that Apple had 16
percent of smart phone market volume in 2010, but a 29 percent
share of revenue. Nokia was second with 20 percent of market volume
and RIM third with 15 percent value share. With such a considerable
market share in the cell phone market, a readily adaptable device,
and an easy road to application development for programmers, one
would expect that Apple would have a presence in the NCF world.
It may take 12 months or so before NCF technology greets the
customer and merchants on a daily basis, but looking carefully at
the early-in market players could net positive results for an
I have no positions in any stocks mentioned, and no plans to
initiate any positions within the next 72 hours.
Bill Miller's New Stock Picks Fail to Beat the