Near Field Communication Market Size, Share, Industry Report, Revenue Trends and Growth Drivers
Near field communication market is expected to grow from USD 18.0 billion in 2020 to USD 34.9 billion by 2025, at a CAGR of 14.2%. The major factors driving the growth of the NFC market are the increasing trend of mobile commerce and the growing adoption of wearable technology. However, the issue of short-range communication is expected to restrain the growth of the market.
Reader emulation is attributed to hold the largest share of the NFC market
The market for reader emulation is projected to witness highest growth in the NFC market for the forecast period, as the majority of mobile phone and retail applications use NFC chip in reader emulation mode. There is high adoption of NFC-based mobile wallets, such as Goggle pay, Samsung pay, Apple Pay, and Android Pay, which are expected to witness the highest CAGR in the coming years, owing to the high demand originating from payments.
Applications of NFC:
Contactless Payments: One of the most prominent applications of NFC technology is in contactless payment systems. NFC-enabled smartphones and payment cards allow users to make secure transactions by simply tapping their device on a compatible terminal. This convenience has fueled the adoption of NFC for retail payments, public transportation fares, and ticketing systems.
Access Control and Security: NFC technology is widely used for access control and security applications, such as keyless entry systems for buildings, hotels, and vehicles. NFC-enabled cards or devices serve as digital keys, granting authorized individuals access to restricted areas or resources with a simple tap or swipe.
Smart Retail and Marketing: NFC tags and stickers are utilized in smart retail and marketing initiatives to engage customers and enhance their shopping experience. By tapping their smartphones on NFC tags attached to products or displays, shoppers can access product information, promotional offers, and loyalty rewards, creating interactive and personalized retail experiences.
Identity Verification: NFC technology is leveraged for identity verification and authentication in various contexts, including e-passports, driver's licenses, and employee badges. NFC-enabled documents or credentials store encrypted biometric and personal data, providing a secure and convenient method for verifying identity and enhancing security.
IoT Connectivity: NFC plays a crucial role in connecting and configuring IoT (Internet of Things) devices in smart homes, offices, and industrial settings. NFC-enabled devices can be easily paired and configured by tapping them together, simplifying the setup process and enabling seamless interoperability between IoT devices.
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Trends Shaping the NFC Market:
Integration with Wearable Devices: The integration of NFC technology into wearable devices such as smartwatches, fitness trackers, and wearable payment devices is a growing trend. NFC-enabled wearables offer users convenient access to contactless payments, access control, and other NFC applications without the need for a smartphone.
Expansion of Mobile Wallets: The proliferation of mobile wallet apps and digital payment platforms is driving the adoption of NFC for mobile payments. As consumers increasingly embrace cashless transactions and digital wallets, the demand for NFC-enabled smartphones and payment terminals is expected to rise.
Enhanced Security Features: With cybersecurity threats on the rise, there is a growing emphasis on enhancing the security features of NFC-enabled devices and applications. Secure element technologies, biometric authentication, and tokenization are being integrated into NFC systems to protect sensitive data and prevent unauthorized access.
Cross-Industry Collaboration: Collaboration between technology providers, financial institutions, retailers, and other stakeholders is driving innovation and interoperability in the NFC ecosystem. Partnerships and alliances are formed to develop standardized NFC solutions, expand market reach, and create seamless experiences for end-users.
Emergence of Smart Cities: NFC technology is playing a pivotal role in the development of smart cities by enabling various applications such as public transportation ticketing, bike sharing, and smart parking. As cities invest in digital infrastructure and IoT deployments, NFC is expected to play an increasingly important role in connecting and managing urban services and resources.
Software to witness the highest growth in NFC market in coming years
The software segment is expected to witness the highest growth in the NFC market in the coming years owing to the integration of its functionalities into routers, infotainment systems, wearable electronic devices, and other NFC-enabled devices. Additionally, more innovative software applications are expected to be launched in the coming years.
Consumer electronics accounted for a major share of the overall NFC market
Consumer electronics is the largest application industry for NFC and accounted for a major share of the overall NFC market with the commercialization of the technology in smartphones, media tablets, smart TVs, set-top boxes, and gaming consoles. There has been an increase in the production of NFC-based interfaces, which enable users to control devices using this short-range communication technology.
APAC to witness highest CAGR of NFC market during the forecast period
The NFC market in APAC is foreseen to grow at a significant rate. The growth of the NFC market in APAC is mainly driven by increasing developments (such as R&D activities, investments, and partnerships among companies) related to NFC in countries such as Japan, China, and South Korea. Additionally, it has some of the world’s fastest-growing and leading industrialized economies. It is witnessing dynamic changes in the adoption of new technologies and advancements in organizations across industries.
Key Market Players
The NFC market was dominated by NXP Semiconductors (The Netherlands), Broadcom (US), Qualcomm (US), Texas Instruments (US), and STMicroelectronics (Switzerland).
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