Apple Global NFC Lineup 2019

With the removal of iPhone 7 and Apple Watch Series 2, the new 2019 iPhone and Apple Watch lineup on the Apple Store is finally global NFC across the board. The Apple Watch Series 5 S5 chip did not gain ‘Express Card with power reserve’ or NFC background tag reading this time. The former would be a very welcome addition for the eternally battery challenged Apple Watch, while the later is necessary at some point if Apple wants to use the ‘yet to be formally unveiled’ NFC Tag Apple Pay to kick QR Code payment systems to the curb.

There is something missing in the lineup however: a low cost entry level global NFC iPhone that’s even lower than the price cuts Apple implemented with the 2019 lineup. As Ben Thompson of Stratechery explains in a great post:

That means that this year actually saw three price cuts:
•First, the iPhone 11 — this year’s mid-tier model — costs $50 less than the iPhone XR it is replacing.
•Second, the iPhone XR’s price is being cut by $150 a year after launch, not $100 as Apple has previously done.
•Third, the iPhone 8’s price is also being cut by $150 two years after launch, not $100 as Apple has previously done.

The rumored A12 chip iPhone SE2 may well be pie in the sky, but that doesn’t mean that there isn’t market appeal for an inexpensive global NFC iPhone for places like Japan and Hong Kong. Those markets have highly integrated transit networks coupled with highly evolved transit card systems like Suica and Octopus. With both of these on Apple Pay there’s a good opening for a small SE size inexpensive global NFC iPhone, it would do very well.

UPDATE: What’s the best iPhone for Suica?
A reader asked for my recommendation of a good Suica use iPhone in the 2019 lineup. I do not recommend iPhone 8. The superior NFC and Suica performance, plus the Express Card with power reserve and background tag reading features of A12 Bionic and later is a huge leap over previous models. These enhanced NFC functions are important for new Apple Pay features yet to come. I think it comes down to a choice between iPhone XR and iPhone 11, and how long you plan to use it in Japan.

It’s also helpful to remember that 2019 is the last lineup of 4G/LTE only iPhone. I think iPhone 11 is better optimized for 4G in the long run as Japanese carriers start to switch over bands to 5G. There is also the much better camera to consider. Last but not least is battery. The power optimization of A13 Bionic is going to deliver much better battery performance over a longer period of time.

It boils down to this: if you plan to use the iPhone for 2 years iPhone XR is a good choice, if you plan to use iPhone for 3~4 years iPhone 11 is the better choice.

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Apple Pay Suica Needs a Inbound PR Campaign, in English

Apple Pay Suica Inbound first time user experiences are endlessly fascinating and educational. What’s obvious and works for people who live in Tokyo, isn’t the case for visitors. The Cup of Tech podcast from July 16 highlights the frustration of not being able to pay for everything with credit/debit cards, and a positive first time Apple Pay Suica use experience.

The 5 minute mark is the tech low point: the state of cashless payments in Japan, but there is no color on what kinds of stores or businesses did not accept credit cards, and the comment about using PASMO and Suica for payment is weird: “It’s usually one or the other, it’s not both…. so I guess you have to have both.” I guess Zach never figured out that Japanese transit cards are compatible with each other.

The 6 minute mark is the tech highpoint: using Apple Pay Suica which Zach assumed he could not use because he read somewhere that, ‘you could only do this on phones sold in Japan.’ Fortunately he found out that his Apple Watch works with Apple Pay Suica and discovered the joys of using Suica Express Transit and recharging with Apple Pay on the go.

Both experiences make it clear that most people visiting Japan with global NFC iPhones are completely unaware of Apple Pay Suica and the ease of adding it to Wallet with the super simple SuicaEng app (which Zach highlights in a later podcast). I know because in 2 years of hosting a Apple Pay Suica guide, the page view analytics show that not many people are actively searching for Apple Pay Suica information in English.

JR East has done many Apple Pay Suica campaigns aimed at Japanese commuters, it is time that JR East and Apple create an English language Apple Pay Suica campaign for tourists that covers the ease of adding it and using it. Plaster the stations, wrap the trains. Waiting to do everything in 2020 for the Tokyo Olympics is waiting too long.

Update: I forgot to mention that a campaign from JR East and Apple can also help counter the 7pay QR Code security meltdown scandal that has poisoned contactless payments for everybody, even for FeliCa NFC, which has a long successful security track record and absolutely nothing to do with QR.

The Mystery of Apple Pay Octopus and iPhone 7 FeliCa Support

There are a few remaining fuzzy spots in the Apple Pay Octopus saga. The story I broke back in December from trusted sources clearly had a Chinese New Year release target. The story went dark but busted wide open again with the Apple Pay JSON server code leak on June 25 that made it absolutely clear Apple Pay Octopus would finally arrive with iOS 13. Octopus Cards Limited (OCL) had no choice but to issue a premature press release stating ‘Apple Pay Octopus is coming, more details soon’ and nothing else.

Why the delay? It clearly was not the Smart Octopus in Samsung Pay exclusivity window that ended in December 2018. We may never know the whole story but I suspect that iPhone 7 FeliCa support is one reason for the delay, but certainly not the only one.

It makes sense for Apple and OCL to release Octopus that can be used on as many Apple devices as possible, the bigger the potential user footprint, the better. Octopus will work on Apple global NFC devices: iPhone 8/X/Apple Watch 3 and later. The important question is how badly do Apple and OCL want to add iPhone 7/Apple Watch 2 to the supported device list?

I previously wrote that Apple announced iOS 13 Core NFC enhanced tag support (FeliCa, etc.) for (all) iPhone 7 devices and later at WWDC19, but this does not sync with Apple Pay Suica device requirements: Apple is telling developers that all iPhone 7 models are good for NFC Read/Write FeliCa but telling customers that only iPhone 7 JP models are good for NFC card emulation FeliCa.

In a later post I quoted FeliCa Dude:

There are millions of NFC-F phones and devices outside Japan. That is because Type A and FeliCa are core requirements for NFC certification. If a phone supports NFC, it supports FeliCa.
What is required to be compatible with most payment terminals in Japan is an Osaifu-Keitai provisioned secure element: that can be a SWP-enabled SIM card (not available yet), the Mobile FeliCa chipset with embedded SE, or an iPhone 7 provisioned for Osaifu-Keitai.
The international iPhone 7s can do basic FeliCa read/write without encryption, because they embed a FeliCa-capable CLF <contactless frontend>. Apple has chosen not to provision them with Osaifu-Keitai keys, probably to avoid paying royalties to FeliCa Networks for each device.

This sparked some fascinating comments from Twitter user Lukas and, lo and behold, the very FeliCa Dude himself, an unexpected and pleasant surprise:

As always, the Dude delivers. Abide in the Dude, his knowledge and keen insight on all things NFC contactless and FeliCa is without peer. In a nutshell this means that OCL could offer Apple Pay Octopus on all iPhone 7 and Apple Watch Series 2 devices and add them to the Global NFC Apple device list…but will they? If OCL and Apple can supply the necessary keys in the over the air (OTA) iOS 13 release via the in-house Apple FeliCa keys server, all the better. Either way I think we will find out very soon, possibly as a ‘Apple Pay Octopus coming to Hong Kong’ side mention in the Apple Card release press kit.

Now that the FeliCa Dude has checked in, I hope he can find an appropriate outlet, blog or otherwise, to enlighten us, whatever the occasion. He is a far better writer than I will ever be. I’ve learned a lot from his writings, I know a lot of other people can too. The world needs to hear from the FeliCa Dude, not my cheap imitation.


UPDATE
FeliCa Dude has answered and posted the definitive take of iPhone 7 FeliCa support for all things from Octopus to iOS 13 Core NFC. We own him thanks for taking the time to cover all the angles in such detail.

The crucial section: “In my opinion there are only three reasons that Apple should not be able to bring Octopus emulation to iPhone 7:

  • If they are unable to allocate IDm (card unique ID) values to these non-blessed devices because that process is tangled up with FeliCa Networks
  • If they shot themselves in the foot and disabled their ability to interface their secure element to the FeliCa CLF (contactless frontend) in the PN67V on those non-Japanese iPhone 7 devices because they didn’t see Octopus coming.
  • They don’t feel like supporting iPhone 7 at all, not even the Japanese models: each device has a different generation of secure element, and additional development/testing/certification work may be required for them. This is again a combination of what Apple is willing to do and on which hardware platforms OCL is willing to authorize Octopus to be emulated on. It’s nothing to do with FeliCa Networks or Sony.”

Apple Pay Octopus Launching in Hong Kong with iOS 13 and Apple Maps Transit Integration

10/22 UPDATE: Beta tester leaks suggest Apple Pay Octopus launch is close


It’s official, Octopus Cards Limited announced Apple Pay Octopus on July 11, 2019

It’s finally happening. Hong Kong iPhone users have waited eagerly for the ubiquitous Octopus transit card to arrive on Apple Pay ever since the first global FeliCa iPhone models were announced in September 2017. They were disappointed when Octopus Cards Limited (OCL) unveiled the first smartphone wallet version of the FeliCa based Octopus as Smart Octopus in Samsung Pay in December 2017, reportedly an exclusive deal. Needless to say, there was no mention of Apple Pay.

After Apple and OCL set things in motion in December 2018 with tests for a tentative Chinese New Year launch but then put things on hold, Hong Kong iPhone users are finally getting their wish: Octopus on Apple Pay will launch in Hong Kong with iOS 13. The iOS 13 beta contains specific Apple Pay Octopus references along with Apple Pay server side references (link now closed) which indicate that OCL is field testing with the latest beta:

Screenshot of live Apple server link JSON code June 25 10:00 am Japan local time, link was terminated by 3 pm

The June 25 code leak forced their hand and OCL officially announced Apple Pay Octopus on July 11 after not answering earlier requests for a comment, the press release promised more details soon:

Suica Similarities
Octopus is based on the same FeliCa technology used for Suica and both cards are very similar. Octopus is used extensively for fast transit and contactless payments of all kinds. According to Wikipedia there are over 33 million Octopus cards in circulation as of 2018 used by 99 per cent of Hong Kong residents. The addition of the Octopus transit payment platform to Apple Pay will drive its adoption in Hong Kong far more than regular credit/debit cards can ever accomplish, as it has in Japan with Apple Pay Suica.

The digital Smart Octopus in Samsung Pay is very similar to Apple Pay Suica, with fast Express Transit-like use and performance, but the setup is a little more user friendly for inbound visitors: a new virtual Octopus card can be created directly in Wallet without using a separate app like SuicaEng or HOP App. You can transfer a plastic Octopus card, but just like Suica and HOP, the plastic card cannot be used after transfer, and the same virtual card can only be used on a single device at a time. The Apple Pay Octopus experience will be the same and Express Transit a given.

Apple Maps Transit Integration
Earlier Apple Pay Octopus reports mentioned Hong Kong Apple Maps Transit launching at the same time. Sources confirmed that Apple Maps Hong Kong transit directions were ready to roll a long time ago but have been held back for a simultaneous release with Apple Pay Octopus. It makes sense for Apple to offer both services as an integrated whole as they did for the Apple Pay Suica launch. If the Japan launch is anything to go by, confirmation won’t come until very late in the beta test cycle, if at all, Transit will simply appear.

Global NFC iPhone and Apple Watch
The Apple Pay Octopus device profile will be the same as Suica: iPhone 7/7 Plus purchased in Japan (models A1779/A1785), iPhone 8/8 Plus, iPhone X, iPhone XS/XS Plus, iPhone XR set up with Face ID or Touch ID, and Apple Watch Series 3 and later. There is a chance that iOS 13 will retroactively enable FeliCa for all iPhone 7 models to support the Apple Pay Octopus launch.

iPhone 11 Pro/11/XR/XS have the A12/A13 Bionic exclusive Express Transit with power reserve feature that gives users an additional 5 hours of Express Transit use when iPhone in low battery power reserve mode. A12/A13 Bionic powered FeliCa performance is also much improved over previous iPhone models because the Bionic Secure Enclave directly handles transactions and bypasses the iOS. My experience with Apple Pay Suica performance on iPhone 11 Pro has been as fast and reliable as plastic Suica with none of the iOS issues of previous iPhone models, performance on iOS 12.3 was stellar and remains stellar on iOS 13. Apple Pay Octopus performance on iPhone 11 Pro/11/XR/XS will have the same advantages.

Hong Kong iPhone X users need to be aware of the iPhone X NFC hardware problem found on early production devices that causes endless issues with Apple Pay Express Transit. Apple has quietly provided replacement Revision B iPhone X devices for users who experience Express Transit gate errors in Japan and China. Hopefully Apple will offer the same courtesy to Hong Kong iPhone X users who encounter the issue.

The First Transit Platform Business Model
The Hong Kong Octopus card was the first real transit platform (contactless transit and eMoney) that had a tremendous impact on the development of Transit for London (TfL) Oyster card, Opal in Australia and other transit card fare systems around the world. It’s great for Hong Kong users that OCL is expanding the Octopus platform to include more digital wallets. I hope OCL continues to expand both the service on other digital wallets, and the business opportunities. For Apple this is an important opportunity to kick Hong Kong Apple Pay use into high gear and will certainly drive Apple Pay credit/debit card use on the recharge end far more than regular bank card Apple Pay, last but not least it’s a vindication of Apple’s global NFC “it just works” anywhere vision for Apple Pay.

9/19 UPDATE: Octopus Cards Limited CEO Sunny Cheung said that Apple Pay Octopus will not launch with iOS 13 (September 19 USA/September 20 Hong Kong), but will “start as soon as possible within the year.”


Related Apple Pay Octopus Coverage
Future of Octopus Transit Platform (6-28-2019)
Global NFC on iPhone and Android (7-16-2019)
iPhone 7 FeliCa and Octopus Support (7-18-2019)
FeliCa Dude Detailed Analysis of iPhone 7 FeliCa and Octopus (Reddit 7-19-2019)
Octopus Coming to Apple Pay (Initial coverage from 12-18-2018)

Dear Tim

Dear Tim

In uncertain and challenging times it’s more important than ever to look for good opportunities. Here is one for the Japanese market. Did you see that news item from JR East about all those old Osaifu-Keitai models being dropped from Mobile Suica in 2020? That’s a few million upgrade opportunities right there.

How about doing a nice little marketing campaign with the Japanese carriers offering a nice trade in price for those old Osaifu-Keitai with a discount on a iPhone XR or iPhone 8? I know, I know, you only want to sell iPhone XR but until the Face ID camera has magic x-ray ability at an affordable price, all those face mask users in Japan will really appreciate a Touch ID iPhone 8 choice. Offer trade in customers free assistance moving and setting up their Mobile Suica accounts in Apple Pay Suica at local Apple Stores. I’m sure it would be a success.

And while you’re at it offer a nice little replacement campaign for those pesky iPhone X units that don’t work with Suica. There are a lot of Japanese customers who would really appreciate Apple reaching out to help and would probably upgrade with a little encouragement and a bug free iOS 12.

Oh and one last thing, offer a similar little iPhone XR/iPhone 8 upgrade campaign in Hong Kong when Apple rolls out Octopus on Apple Pay. With 33 million Octopus card users in Hong Kong I’m sure it would help iPhone sales there too. Apple has a wonderfully unique global FeliCa strategy tucked away in Apple Pay, used wisely it could be a great sales tool.

Love and kisses,

Ata Distance