Why NFC Could be Another Game-Changer for Apple

By Eric Jackson02/16/11 - 08:00 AM EST

NEW YORK (TheStreet ) -- When you're a $330 billion market cap company, you need big things to move the needle. Apple (AAPL_) knows that.

Look at Microsoft (MSFT_). It has the hottest thing in gaming right now with its Kinect gesture control device. It sold 8 million units in the first quarter of its availability, blowing away expectations. It's going through huge upgrade cycles right now in Windows 7 and Office. Yet, the stock is trading down, since announcing its earnings last month.

When Apple announced iPad a year ago, most of the initial coverage focused on its name. (Remember that?) Many skeptics remained -- until they started using one and found out they couldn't live without one.

This is classic Steve Jobs. Don't ask customers what they want. Why? Because they don't know what is possible to create in the future. Instead, give them something they've never experienced but which will be a "must have" once they touch it.

From Apple's viewpoint, iPad was going fill a critical middle-ground between iPhone and the Mac. And if they could create a new product category from nothing, that would create a "meaningful" amount of revenue for them.

The analysts totally blew their job of estimating how big iPad would be last year before it went on sale. Shaw Wu of Kaufman Bros. said in March that he thought they would sell 2 million iPads for the year. The uber-Apple bull, Gene Munster of Piper Jaffray, said in March they would sell 2.8 million in 2010 (though he upped his estimate to 6.2 million by June). Katy Hubert of Morgan Stanley and David Bailey of Goldman Sachs were the most bullish of the analysts, who thought that Apple could ship 6 million iPads for the year. In the end, Apple shipped over 14 million tablets.

So, what are the experts missing at the moment about Apple? The company has a number of irons in the fire at the moment and several could develop into major areas for the company. But I'm most interested in what they're going to do in the area of Near Field Communications (NFC). NFC is a technology that -- after merchants install necessary point-of-sale hardware -- will allow users to pay using their mobile phone rather than a traditional credit or debit card.

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