Apple Inc. (NASDAQ:AAPL) investor Carl Icahn urged the tech giant a few months ago to invest in mobile payments service. Morgan Stanley analyst Katy Huberty says that mobile payment is a significant opportunity for Apple to enhance user experience and add a new revenue stream. The company has an exceptional track record of integrating software and hardware. The company has further differentiate itself and increase value of its devices by adding the mobile payment service.

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Apple can boost worldwide NFC user base by over 170 million

Recent reports suggest that Apple Inc. (NASDAQ:AAPL) may integrate NFC technology into its upcoming iPhone 6, which is expected to hit the markets in September this year. Morgan Stanley analyst Craig Hettenbach says that the NFC user base will grow instantly by about 170 million if Cupertino embraces this technology. The research firm forecasts overall NFC-enabled smartphones to grow at 45% annual rate from 270 million in 2013 to more than 1.2 billion in 2017.

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Ahead of Apple Inc. (NASDAQ:AAPL)’s WWDC next month and product refresh cycle in the fall, there are heightened expectations that the company will unveil its mobile payments strategy. The tech giant has filed a patent, which outlines a payment system that uses NFC as well as WiFi for transactions. It utilizes the secure element to store users’ credit card information. Moreover, Brightwire reported that Apple has partnered with China UnionPay for mobile payment service that will incorporate NFC.

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Apple likely to adopt standalone NFC controller

Apple Inc. (NASDAQ:AAPL) has extended support to NFC and contactless technology by upgrading its mobile Point of Sale terminal infrastructure at its retail stores. Even if the company decides to incorporate NFC into its products, there will be questions about technology implementation. Whether the company will go ahead with with a standalone NFC controller or adopt the integrated combo chip route? To enhance security, will Apple go with the cloud version or invest in tight security provided by embedded implementation of the secure element?

Morgan Stanley says Apple Inc. (NASDAQ:AAPL) is highly likely to embrace a standalone NFC controller, given the technical challenges faced by OEMs with antennas and NFC. As far as security is concerned, the tech giant may go the embedded route, and incorporate a stacked NFC radio and embedded secure element solution.

Apple Inc. (NASDAQ:AAPL) shares inched up 0.03% to $604.80 at 11:31 AM EDT on Tuesday.