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The Near Field Communication (NFC) Systems Market size is forecast to increase by USD 21,742.46 million, at a CAGR of 14.63% between 2022 and 2027. The growth of the market depends on several factors, including the increased adoption of contactless payments, the integration of NFC technology in smartphones, and the rising government initiatives for digital payments.
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The integration of NFC technology in smartphones is notably driving the market growth, although factors such as increasing cybercrimes issues may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Integration of NFC technology in smartphones is the key factor driving the growth of the global near field communication systems market. NFC technology is widely used in iOS or Android-based smartphones. NFC-enabled smartphones use an NFC controller chip connected to an NFC antenna. NFC technology allows users to make secure transactions, share digital content, and connect electronic devices with a single touch. Therefore, increasing demand for NFC-enabled smartphones is expected to boost the demand for NFC systems. NFC-enabled smartphones can be used for peer-to-peer communication, read/write mode, and card emulator applications. In peer-to-peer communication mode, the NFC chip allows your smartphone to connect to other NFC-enabled devices to transfer data. Data is transmitted at a frequency of 13.56 megahertz.
In the card emulator mode, an NFC-enabled smartphone can function as a smart card or contactless card to make payments. In the read/write mode, an NFC-enabled smartphone can read or write the NFC tags attached to the products that the device scans. The increasing application of NFC systems is compelling OEMs to integrate NFC systems into their products. Since then, many smartphone OEMs have integrated NFC systems into their devices. Therefore, the increasing penetration of smartphones across the world is expected to drive the demand for NFC systems and, in turn, the growth of the market in focus during the forecast period.
The growing adoption of NFC-equipped devices is the primary trend in the global near field communication systems market. Smart wearables and IoT devices are becoming more and more popular due to their increasing functionality for various applications. If these devices are equipped with NFC built-in capabilities, the wearable device will allow users to pay in stores, grant access to public transport, or grant entry into office buildings. companies such as Infineon Technologies offer NFC systems for wearable devices. For instance, SECORA is a system solution that is designed to be embedded into smart wearables to provide contactless secured payment, transportation ticketing, and other applications via NFC. Thus, it enables secure payments, convenient biometric authentication, and other applications.
Furthermore, in April 2022, MagTek launched the DynaProx family of touchless readers. DynaProx and DynaProx BCR deliver the next-generation touchless payment. Both models come with NFC technology, and DynaProx BCR adds a barcode camera for reading a wide variety of 1D and 2D barcodes. Thus, the increasing integration of NFC technology in devices such as wearable devices and IoT devices, coupled with their increasing adoption, will leverage the application of NFC systems and, in turn, will drive the market in focus during the forecast period.
Increasing cybercrime issues are a major challenge to the growth of the global near field communication systems market. Contactless payment systems based on NFC technology embedded in cards, mobile devices, key fobs, wearables, and other devices allow individuals to swipe their cards or mobile devices through POS terminals to make secure payments. When the card is brought close, the contactless payment terminal sends a signal, activating the NFC chip embedded in the card, which responds with a unique identification number (ID) and transaction information. This transaction information cannot be reused, preventing it from being used by cybercriminals.
However, in late 2022, Prilex's developers updated the malware with code that blocks contactless transactions, which results in the terminal prompting the buyer to insert their credit card in the device. This makes malware able to read the data coming from the transaction and causes money theft. Thus, the update in code by cybercriminals may cause cybercrimes while using NFC technology. This will hamper the adoption of NFC systems for contactless payments and, in turn, will negatively impact the market in focus during the forecast period.
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Nordic Semiconductor ASA: The company offers NFC systems such as UHF band RFID, HF band RFID. Also, the company offers cellular IoT wireless technologies and connectivity devices.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative market growth analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market share growth by the retail segment will be significant during the forecast period. The retail industry uses the NFC system to manage inventory, assets, and supply chains. Factors such as high customer satisfaction and better inventory control have prompted large retailers such as, Amazon and Flipkart, to mandate the use of NFC systems in their warehouses. This has boosted the revenue of the global market in the retail segment.
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The retail segment was valued at USD 5,480.10 million in 2017 and continued to grow until 2021. The emergence of unmanned retail stores and self-checkout stores will increase the adoption of NFC systems in the retail sector during the forecast period. The adoption of smartphones by individual users has led to the adoption of self-checkout processes that reduce the time it takes to complete the payment process. In the self-checkout process, once payment is made through a payment gateway, the NFC tag is deactivated and the consumer is allowed to leave the store. High customer satisfaction and better NFC systems will lead to greater acceptance of NFC systems in retail stores. In addition, companies such as NXP Semiconductors offer NFC systems such as NFC tags for retail. Hence, all these factors drive the segment and, thus the market to watch during the forecast period.
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North America is estimated to contribute 34% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Buyers of NFC systems in North America include manufacturers of smartphones, smartwatches, and point-of-sale terminals. These OEMs are integrating NFC systems into their devices to give consumers access to a wide range of applications. B. Contactless payments, data exchange, and access to parking spaces. Also, the presence of leading companies, such as Qualcomm Technologies, Intel, and Broadcom, in the region leverages the adoption of NFC technology and, in turn, NFC systems in the region.
For instance, in December 2022, HID announced the acquisition of Janam Technologies, a leading vendor of handheld mobile computers and readers. The acquisition enhances various technologies offered by HID, including the NFC system. Therefore, the presence of major companies coupled with growing developments will drive the growth of the regional market during the forecast period.
The market report forecasts market growth by revenue at global, regional & country levels and provides a market research and growth analysis of the latest market trends and analysis and growth opportunities from 2017 to 2027.
The market is witnessing substantial growth, driven by the increasing prevalence of mobile commerce and the integration of wearable technology. Short-range communication capabilities have become pivotal in facilitating seamless mobile transactions for smartphone users. Point of Sale (PoS) systems, backed by financial institutions, leverage wearable technology and short-range communication protocols, enhancing the overall transmission frequency.
While the adoption of NFC-based mobile wallets is on the rise for retail applications, security concerns and privacy protection remain paramount. Financial institutions are investing in robust measures to counter malware applications and ensure the safety of transactions. As substitute payment methods gain traction, the NFC alternative and reader emulation technologies contribute to the evolution of mobile payment ecosystems. Non-Auxiliary products, such as NFC-enabled accessories and NFC IC/Chips, play a vital role in access control and data sharing. The banking and finance sector, leveraging mobile technologies, cloud infrastructure, and digital e-wallet apps, is at the forefront of integrating NFC systems to provide efficient and secure transaction experiences for consumers.
NFC Systems Market Scope |
|
Report Coverage |
Details |
Page number |
178 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 14.63% |
Market growth 2023-2027 |
USD 21,742.46 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
13.41 |
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
Performing market contribution |
North America at 34% |
Key countries |
US, Canada, China, Japan, and UK |
Competitive landscape |
Leading companies, market positioning of companies, competitive strategies, and industry risks |
Key companies profiled |
ASSA ABLOY AB, Avery Dennison Corp., Broadcom Inc., Intel Corp., KISI Inc., MagTek Inc., Murata Manufacturing Co. Ltd., Nordic Semiconductor ASA, NXP Semiconductors NV, Qualcomm Inc., Samsung Electronics Co. Ltd., Sony Group Corp., STMicroelectronics NV, Texas Instruments Inc., Thales Group, The Swatch Group Ltd., Zebra Technologies Corp., Zeus RFID, Renesas Electronics Corp., and Infineon Technologies AG |
Market dynamics |
Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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