Report: Apple's iWatch to contain NFC for mobile payments

Apple (NASDAQ: AAPL) is going to add Near Field Communications technology to its forthcoming wearable device, expected to be called the iWatch, according to a Wall Street Journal article. That would enable customers to use the watch to process digital payments wirelessly and expand the gadget's functionality beyond fitness and health monitoring.

The report, citing unnamed sources, said that Apple also plans to add NFC to the next iteration of the iPhone; the addition of NFC to the iPhone has been previously reported by other news outlets. The WSJ article noted that NFC in both devices would make pairing them easier. 

According to the Journal report, the smart watch will be offered in two sizes, both featuring a curved OLED screen along with sensors to track and monitor health and fitness data.

Apple declined to comment, according to the Journal. The company is expected to announce both the wearable and the new iPhone--a 4.7-inch model and one with a 5.5-inch display--at a media event on Tuesday. 

Apple has reportedly struck deals to enable mobile payments with Visa, MasterCard and American Express, and is also reportedly working with NXP Semiconductors to enable the NFC solution for the iPhone.

Re/code reported last week that even though Apple is expected to unveil the iWatch at the media event, it is likely not going to start selling the gadget until early 2015. The Journal report said it is unlikely that Apple will release the iWatch this year as it works out engineering issues. Re/code has also reported that Apple is considering a price point of $400 for the watch, though prices have not been finalized and Apple is expected to offer a range of prices, perhaps putting the smaller version at a lower price point.

Bringing NFC to the iWatch could enhance its functionality, especially if Apple launches a robust mobile payments program. Yet Apple's foray into wearables is not a sure-fire success. Many smart watches have struggled to gain traction because of their cost and limitations on their functionality. Many smart watches on the market need to be paired to smartphones via Bluetooth, though a few, such as the new Samsung Gear S, have built-in 3G connectivity.

ABI Research reported that global shipments of wearable devices, including smartwatches and activity trackers, totaled just 2.9 million units in the first quarter of 2014, according to the Journal.

Payment mobile payments, NFC can also be used to link together phones with other consumer electronics, including wireless speakers, as Sony as done. Thus, NFC could factor into Apple's HomeKit software for controlling consumer appliances.

Meanwhile, according to new report, Jonathan Ive, Apple's senior vice president of design, has been "bragging" about how cool he thinks the iWatch is. The New York Times report, which cited an unnamed designer who works at Apple, noted that Ive said Switzerland is in trouble--though he used a "much bolder" term for "trouble" to convey the impact that he thinks the iWatch's launch will have on the country known for designing high-end watches.

One of those companies, Swatch, has indicated it is willing to strike out on its own in the smart watch market. The company plans to unveil its Swatch Touch device next summer. Swatch CEO Nick Hayek recently told Reuters that Swatch's new smart watch would support Bluetooth and could be used for health and fitness monitoring.

For more:
- see this WSJ article (sub. req.)
- see this NYT article
- see this The Verge article
- see this 9to5Mac article

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