Insights into how technology and the outsourcing of R&D are changing the software industry

Well I was in the middle of working on a post on the topic in today’s title and of course as I was nearing completion, the news about Apple’s iTravel app and associated patents. So I’ve been reading through some of the patent information on the app and have a lot of re-write/re-framing to do. Apple may indeed want to own your mobile travel experience, but I’m not sure NFC is the way they’re going to do it (hint: they are really good at apps and user experience).  However, I don’t want to let the week go by with at least a few thoughts:

• NFC is definitely coming to smartphones.  This won’t be limited to the iPhone. Samsung is trialing it as well and while Nokia has cancelled one of it’s initial NFC phones, I’m sure they’ll come out with one eventually. And you can be damn sure that if Apple comes out with a next-gen iPhone with NFC that Google won’t be far behind…even if just out of spite.
• NFC for mobile payments: I can see this as a viable use case. I’m not sure whether or not the smartphone is the most viable vehicle for mobile payments.  Contactless smart cards and RFID-based payment systems like Mobil’s Speedpass have been around for almost a decade. For any number of reasons this mode of payment has taken off as predicted.  Not to say that it won’t, but I don’t think that the introduction of NFC in smartphones will create some sort of tipping point (although I’m sure Apple and the mobile network operators who are searching for new revenue streams hopes so).
• NFC for location-based services: I read earlier this week that someone thought that NFC or perhaps another RFID-based approach may help provide more accurate tracking of location and improve the targeting for LBS.  In a word…no.  NFC has a range of mere inches, so unless someone installs millions of NFC readers per square mile, it ain’t working.  And while other RFID technologies — most likely UHF (915MHz) which provides ranges of up to 10 meters — can ameliorate the range issue, anyone who has had experience in RFID projects know the challenges of “collisions”, orientation and dispersion (reflecting signals off metal, absorption of signal by liquids) can cause non-reads and mis-reads.  And it would still require a fare amount of readers to be installed to be workable.  While there was a lot of hubub about the use of RFID badges at Facebook’s f8 conference, having readers at different stations where you scanned in your location is far from what will happen in the real world.

Now let me tackle the travel specific use cases.  First I will say that Apple’s iTravel patent application shows a lot of promise and there are a lot of good ideas in there.  I’m just not sure that it will happen quickly, as described, or that NFC plays as central a role as envisioned.  Let me hit on a few things quickly:

• NFC for identity security: I absolutely agree that an NFC-enabled device could transmit personal identification information and enhance security at check-in, at TSA security and even to board the plane.  I just think that it’s more likely that the vehicle for this will be government-issued ID’s like a driver’s license, not cell phones.  2 reasons: government-IDs are dished out in sufficient quantities each year to make the costs fairly low and they contain other security features to prevent fraud and misuse.  Cell phones on the other hand are more prone to be lost or misplaced and are more easily hacked via the mobile operating system.  I mean if you left your phone at the local Starbucks and I picked it up, could access or your ID credentials, itinerary and mobile boarding pass, the potential for bad things happening is much higher, especially in the more self-service environment envisioned by Apple’s iTravel patent application.
• Costs: If the phone is the primary source for NFC, there is a fairly high infrastructure cost that needs to be borne at airports and throughout the travel itinerary to put in the readers.  Additionally, if limited to the phone, there will be an awful lot of people who don’t have NFC-enabled smartphones, so a lot of the planned efficiencies in the system won’t be gained as you’ll still need personal intervention (at check-in desks, TSA security) to accommodate those folks.  Also, if you’re traveling as a family, will every husband, wife and child have to have their own NFC-enabled smartphone in this world?
• NFC Phones as Room Keys: In a hotel setting, using NFC-phones as a replacement doesn’t make sense because it’s going to be a long time (if ever) that all guests will have NFC-based phones for one, so there will still be the need for traditional keycards.  And mag-stripe is much less expensive than NFC.  Plus there are plenty of places you’d want to take your room key, but not your phone (the pool, beach, scuba diving are just a few).  The hotel chains have a hard time convincing their individual hotels to pay to keep mission-critical IT systems up to date because they rather spend the money to replace the carpets and paint the walls (much more visible to guests), will they want to pay for NFC infrastructure ahead of that?
• Viable Alternatives: At each phase where NFC is supposed to be used, there are plenty of non-NFC alternatives which already exist or may be better solutions that don’t cost anything to implement.  Mobile boarding passes already exist, you can “bump” contacts or payments on the iPhone today, mobile payment mechanisms like PayPal or direct thru the mobile network provider are already in place.
• Mobile alerts to guests for Reminders, Special Offers: If you’re doing this over the phone — and I think this is a great idea — there are many other alternatives — SMS, apps, email — to using NFC or another RF-based wireless protocol to do this.   Again, I will point you back to my comments on NFC for location based services as to why I don’t think this application is a fit.

Now I will end by saying that I may be battle scarred on this topic from working in the RFID business for 5+ years and have been seeing the same hockey-stick projections for a decade (they just keep moving out the years at the bottom).  I am really juiced on how technology continues to enhance and shape the travel industry, I’m just not sure how big of a role that NFC will play in its transformation.

What’s your view?  Please comment.