iPhone with RFID; Apple is heading down the path of the Newton

  

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I was talking with my friend John Sculley this morning, Apple's former CEO, about the RFID market and some interesting opportunities and it occurred to me that Apple is about to make a huge mistake. History may be repeating iteself.

For those of you who are Apple historians you'll remember that Sculley was hired by Steve Jobs to bring a marketing focus to the struggling company. Sculley was Pepsi's CEO and Jobs said "Do you want to sell sugar water the rest of your life or change the world?" Sculley took Apple to the next level growing the company from $800 million to over $8 billion in sales. He accomplished that growth through brilliant marketing (including the Superbowl Advertisement copying Orwell's 1984. Considered the best TV ad of all time). There were some losers in that reign however. 

Apple's G5 iPhone with NFC may be thier next Newton

One of Apple's biggest failures was the Newton. A big mistake in the early PDA market, the Newton was finally killed in 1998. It was just before the emergence of the Treo, Blackberry and of course eventually the iPhone.

Apple iPhone with NFC or UHF RFID?

Apple is about to make a similarly colossal mistake and lose a huge market advantge with the G5 iPhone. How? By adding near field communication (NFC) to the iPhone platform instead of UHF (ISO 18000-6) RFID in the next gen iPhone. But, like Palm during the early days of the PDA market, there is another big winner waiting in the wings for RFID in mobile phones.

NFC is a long-term mistake for mobile phones like the G5 iPhone

The reasons NFC is a mistake for the iPhone is it greatly limits the utility of the platform. NFC relies on high frequency (HF) RFID at 13.56 MHz. This gives an effective read range of 2-4" and requires a tag that currently cost about $.50 and is being used increasingly less and less because tags are both big and expensive. In short NFC for mobile phones is:

• More expensive
• Requires much larger tags
• Has a shorter read range
• Can be less secure

Ultra High Frequency (UHF) at 902-928 MHz would have significantly more usefulness for both businesses and personal use. Just look at what applications have already committed to UHF - Vail Resorts is doing a major roll-out, all the top medical device manufacturers like J&J, Medtronic, Smith & Nephew use UHF, IATA has determined UHF is the global choice for tracking luggage, IT Assets for major banks like Wells Fargo and Bank of America are all being deployed with UHF. Dell, IBM and HP are shipping servers and laptops with UHF RFID. American Apparel has their clothes tagged with...you guessed it...UHF RFID.

Imagine the iPhone user experience (with UHF) in these scenarios. You ride up the lift line with someone you enjoy and could scan their pass to get an email address. You are working in a data center and want to access configuration info on your company intranet so you scan the server's RFID tag. You wonder what the best sweater to go with a particular skirt is so you scan the UHF tag on the sweater. You're a nurse and you want to verify the patient's prescription so you scan his armband.There is a much bigger world with UHF beyond paying for concert tickets and Diet Pepsi. 

UHF has:

• Greater read range than NFC (6-10 inches)
• Cheaper tags (under a dime, three cents on the horizon)
• Wider adoption already in place
• greater security with tamper proof tags, encryption, etc.  

If you are in the RFID industry you know the biggest hardware player is also one of the largest makers of mobile phones - Motorola. (NYSE: MOT). MOT has RFID engineering skills across the hall from the phone group. What RFID does MOT make already today? You guessed it UHF (ISO 18000-6).

Imagine the Droid operating system with a UHF RFID reader. Now picture yourself walking into the Met or Louvre and having your Droid phone lead you on a guided tour. The possibilities are limitless for a UHF reader in a strong mobile platform like the Droid.

Apple is about to make a big mistake and will claim RFID is to blame if it's not adopted, but it will be like the Newton. They are making the wrong decision and someone else will emerge as the big winner. UHF is more useful, more secure, cheaper, and already being heavily adopted. In this instance the victor will be MOT.  When MOT calls ODIN to help with their RFID apps we'll be excited to help because it will change the world!