Droids, iPhones, and RFID to drive new mobile shopping and transit apps in 2010

An offshoot of RFID known as near field communication (NFC), along with the latest Android phones and Apple's iPhone, are now helping the US to catch up to Europe and Asia in mobile shopping and mass transit applications, said analysts and other experts at this week's National Retail Federation (NRF) conference in New York City.

Among the ever escalating numbers of smartphones available in the US, Apple's iPhone still leads the way in those as well as other mobile application areas, noted David Dorf, director of retail technology at Oracle.

The more than 10,000 iPhone apps online in Apple's App Store already include some photo-oriented "vision" apps. Examples include an app from Sears which helps you to locate a product in stores based on an uploaded product photo, and one from Wal-mart that allows you to use a picture of a room in deciding what size HDTV to buy.

With the recent entrance of Motorola's Droid and Google's Nexus One, for instance, apps of this kind are also headed to the open source Android platform, said speakers in an NRF panel session.

Developers are at work, too, on location-aware apps that will use GPS to send you discount coupons based on where you happen to be, and on augmented reality apps combining a mobile phone's camera view with multiple layers of related information.

Meanwhile, commuters in New York City and San Francisco have been taking part in NFC trials involving the use of software-based token applications that bill their credit cards for mass transit use.

Participants have been able to hop aboard trains and subway cars simply by waving their phones in front of contact-less NFC readers near turnstiles in mass transit stations, said Sahir Anand, research director for retail, hospitality and Consumer Product Group practice at the Aberdeen Group analyst firm.

The United States has long lagged behind some other parts of the world -- most notably Japan and the Nordic countries -- in mobile shopping and mass transit apps, pointed out Mohammad Khan, president and founder of ViVOtech. But with the advent of new smartphones and NFC, the US is getting poised to "leapfrog ahead," Khan contended.

As one big barrier to progress, Khan cited the roles that US wireless carriers traditionally play in determining which apps will be offered on phones running on their networks.

In Japan, smartphones use the high-bandwidth, government-operated NTT Dokomo network. In some other countries, people typically buy unlocked phones independently of mobile carriers, and then configure their phones to specific wireless networks.

But in the US, many people purchase locked phones direct from carriers such as AT&T, Verizon, Sprint, and T-Mobile, getting subsidies on the phones in exchange for inking long-term service contracts.

Instead of collaborating in spurring mobile commerce, US mobile network gatekeepers are "fighting with each other," Khan acknowledged.

Moreover, the US mobile carriers vary greatly among each other in terms of coverage areas and available bandwidth.

Apple is also a "gatekeeper" of sorts, Khan suggested, speaking with Betanews after the presentation. But he also pointed to a difference. Apple gives developers the freedom to develop myriad apps for iPhones, so long as the apps abide by Apple's guidelines, Khan said.

The fact that the iPhone runs in the US only on AT&T poses another challenge. "But we're seeing that this will change over the year ahead," he predicted.

Also over the coming year, the first crop of augmented reality mobile apps will make an appearance, permitting smartphone users to access "layers" of discount coupons, reader reviews of products, and in-depth product information based on where they're located, according to Oracle's Dorf.

Augmented reality apps will also make use of video cameras and compasses in the information overlays. Users will be able to attach and tag information, and to tell other people about where they've been. "This will create a new sort of digital signage," said Dorf.

A software company named Layar has already produced an augmented reality browser which works with the mobile phone's camera view. Developers have now used the browser to attach a layer of information about architectural landmarks from Wikipedia.

But Randy Vanderhoof, executive director of the Smart Card Alliance, maintained that NFC will help overcome traditional limitations of cellular networks in the US by letting developers create location-based shopping apps that run on private local wireless networks.

NFC is designed to eliminate the need to own a specific type of smartphone or subscribe to a cellular service with specific geographic coverage if you want to use mobile apps.

Under this kind of scenario, when you enter a retail store and wave your phone at a contact-less reader, the retailer will offer you coupons and buying recommendations based on where you're located -- and possibly on your history of past purchases at the store, as well.

In an earlier trial on San Francisco's Bay Area Transit (BART) system, for example, participants got coupons to Jack-in-the-Box restaurants.

Another NFC application, previously tested in New York City, will receive a commercial rollout there later this year, according to the Aberdeen Group's Anand. With the commercial launch, access to the smartphone system will expand beyond the Citibank customers who took part in the earlier trial to include customers of all banks, he elaborated.

Vanderhoof told Betanews that, despite reports to the contrary, security and privacy risks around NFC are practically nonexistent, since information can only be intercepted within a four-foot range between the smartphone and the contact-less reader.

In contrast, panelists didn't exactly deny that there are some security and privacy threats attached to mobile apps running on the mobile Internet.

But on the other hand, losing your smartphone might pose much less of an identity theft hazard than losing your wallet. Unlike a walletful of credit cards, smartphone apps are surrounded by protections such as encryption and password authentication, the NRF audience was told.

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