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November 25, 2011

MNOs will be forced to cooperate with Google, Apple in mobile wallet wars: study

They will see their market shares eroding during 2012-16 as Google and Apple claim loyal users

By CBR Staff Writer

Mobile network operators (MNOs), who provide NFC-based mobile wallets, will see their market shares eroding between 2012 and 2016 as Google and Apple claim loyal users, according to ABI Research.

According to its new study, "Mobile Wallet Strategies", Google Wallet will also succeed in markets where MNOs prefer not to spend capital to develop and support mobile wallet infrastructure.

These MNOs will partner with Google and will benefit financially from the ventures. Apple will factor into the erosion of MNO mobile wallet market share. MNOs, which will provide 75% of all mobile wallets in 2012, will shrink to 63% in 2016, the study said.

NFC senior analyst, mobile commerce Mark Beccue said that by the end of 2012, Google will prove that Google Wallet is a hit with consumers, by 2014, the industry will see Google Wallets supported alongside competing MNO offerings globally.

Beccue added, "Apple will launch a mobile wallet product in 2012. Apple’s MNO partners will allow Apple to offer their mobile wallet to consumers who have iPhones, regardless of whether or not the MNO has a competing mobile wallet."

The study expects NFC-based mobile wallet users to grow to 594m in 2016, primarily due to MNOs and OS players flooding the marketplace with NFC-capable mobile phones, particularly in the US, Western Europe, Japan, and Korea. The business cases around merchant offers and interaction are compelling enough to pull mobile wallet ecosystem players in alignment.

The research expects that by as early as 2014, MNOs will incorporate OS and OTT mobile wallets into their umbrella mobile wallets, slowing down the growth of truly independent mobile wallets from OS and OTT providers.

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