According to the new research report titled "NFC Chip Market Forecast to 2028 - COVID-19 Impact and Global Analysis," published by The Insight Partners, the market is expected to reach US$ 17,827.0 million by 2028; it is estimated to grow at a CAGR of 6.7% from 2021 to 2028.
The North American region is a major market for smartphones, with smartphone penetration in the US increasing from 81.6% in 2020 to 82.2% in 2021. In addition to smartphones, consumer electronics such as televisions, speakers, refrigerators, cameras, and washing machines also use NFC chips to facilitate contactless data transfer. Consequently, the growing penetration of smartphones, rising demand for smart consumer electronics, and increasing investments in the aviation sector are driving the demand for NFC chips in the North American region
Similarly, Europe is a significant market for smartphone manufacturers, and the European smartphone market has been gradually recovering from the COVID-19 pandemic since the first quarter of 2021. In the first quarter of 2021, the improving COVID-19 situation helped increase European smartphone sales by nearly 6% annually, with Samsung regaining its top spot from Apple. Furthermore, the presence of major smartphone companies such as Samsung, Apple, Xiaomi, Oppo, Huawei, OnePlus, Realme, and HONOR is fuelling the growth of the NFC chip market in the region
The global NFC chip market is segmented into type, storage capacity, end-user, and geography. Based on type, the NFC chip market is segmented into active and passive. Based on storage capacity, the NFC chip market is segmented into 64 bytes, 168 bytes, 180 bytes, and 540 bytes. Based on end-user, the NFC chip market is segmented into consumer electronics, automotive, retail, healthcare, and others.
Key Findings of Study:
NFC POS implementation cost is a major drawback of this chip, particularly for small and medium-sized retailers. Accepting NFC payments can be expensive for retailers and upgrading equipment and devices to support NFC transactions is necessary since regular payment terminals cannot process them. Additionally, the NFC system may be difficult to understand for non-tech-savvy users. Short-range data transfer is the only option available for NFC payments, which means that the communicating devices must be within 4cm range or have a gap of 4cm or less between them. This limitation is a significant disadvantage of NFC technology. The frequency at which NFC broadcasts is 13.56 MHz, and data is transferred at speeds of 106Kbps, 212Kbps, or 424Kbps, which is adequate for transferring contact information, photos, and music.
The privacy protection offered by NFC technology for a device is inconsistent, which leaves it vulnerable to unintentionally receiving malicious software or data. The NFC protocol has limited precautions against data sniffing and manipulation, and security remains a significant concern as the 'Contactless Payment System' is one of the most popular applications of this technology. Since NFC does not require authentication, it is possible to send malware apps, posing a severe threat to the user. Thus, to overcome these barriers, a secure NFC application is necessary, which integrates all possible capabilities of an NFC-enabled application.
The use of contactless payment methods poses a security risk as it allows direct deduction of money from customers' accounts without any pin identification, which can be exploited in case of card or smartphone theft or loss. Furthermore, the adoption of NFC technology is hindered in developing countries like India due to the widespread usage of traditional payment methods like cash and cards. Additionally, the significant proportion of elderly citizens in these countries who are resistant to change and prefer traditional payment methods is impeding the growth of the NFC chip market.
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