Updated Sept. 4, 2014 3:47 p.m. ET
Apple Inc. AAPL -0.83% Apple Inc. U.S.: Nasdaq $98.12 -0.82 -0.83% Sept. 4, 2014 4:00 pm Volume (Delayed 15m) : 84.87M AFTER HOURS $98.28 +0.16 +0.16% Sept. 4, 2014 7:59 pm Volume (Delayed 15m) : 845,715 P/E Ratio 15.75 Market Cap $592.44 Billion Dividend Yield 1.92% Rev. per Employee $2,214,380 09/04/14 Tesla Confirms Nevada to Get B... 09/04/14 Tim Cook Says Apple to Add Sec... 09/04/14 Credit-Card Industry Ramps Up ... More quote details and news » plans to include short-range wireless technology in its coming smartwatch, according to people familiar with the matter, signaling that it sees a role for the device in digital payments.
The gadget's use of near-field communication, or NFC, reflects Apple's broader ambitions for the so-called iWatch beyond health and fitness tracking, the most commonly cited use. Apple also is expected to add the wireless technology to the next versions of its iPhone, people familiar with the device said, potentially simplifying the process of connecting, or pairing, the two devices.
NFC wireless is central to Apple's plans to offer so-called tap-to-pay into its mobile devices, allowing users to pay for goods and services using credit cards stored with iTunes, people close to Apple said.
The smartwatch would be offered in two sizes, each featuring a curved organic light-emitting diode screen, those people familiar with the device said. It will include sensors to track and monitor health and fitness data, the people said.
An Apple spokeswoman declined to comment.
Apple is expected to unveil the new phones and smartwatches at an event next week, the people familiar with the matter said. But it wasn't clear when the new smartwatch would go on sale.
People familiar with Apple's plans said it is unlikely that Apple would release the smartwatch this year, because the Cupertino, Calif., company is still working out engineering kinks in production. Earlier in the year, Apple had targeted a November release, these people said.
One person familiar with Apple's suppliers said there is "no way" that it will be able to ship the watch this year. However, Apple hasn't changed its timetable for component suppliers that are shipping parts as scheduled to Taiwan's Quanta Computer Inc., the proposed device's manufacturer. Technology website Re/Code reported earlier that the watch won't be available this year.
Apple plans to take preorders for the smartwatch before it officially goes on sale, a person close to Apple said. It wasn't clear what Apple plans to charge for the devices.
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Despite Apple's string of successful debuts in new product categories including the iPhone and iPad, a new smartwatch isn't a sure hit. Other companies' wearable devices have struggled to break into the mainstream because they offer a limited set of features typically found on smartphones or work only in conjunction with a phone.
World-wide shipments of wearable devices—including smartwatches and activity trackers—totaled about 2.9 million units in the first quarter, according to market watcher ABI Research. That is about 1% of the 300 million smartphones shipped during the same period.
The coming watch is the first product overseen from its inception by Apple Senior Vice President Jonathan Ive, who assumed control of hardware and software design earlier this year.
If the watch's release is delayed to next year, it would likely mean that Chief Executive Tim Cook failed to deliver on a pledge to push Apple into a new product category in 2014—something it hasn't done since introducing the iPad in 2010. However, Mr. Cook has said repeatedly that Apple will take its time to make sure it gets new products right before offering them for sale.
A later-than-projected launch of the watch should have minimal impact on Apple's business. The company's finances are largely driven by the iPhone and anticipation for new larger-screen iPhone models is high.
NFC works by transmitting a radio signal between the device and a receiver, when the two are fractions of an inch apart or touching. Apple likely would have an extra security feature in the phone and possibly the watch that employs a different set of security codes each time it is used, so that credit and loyalty card information is encrypted, according to one person.
By adding NFC to its wearable device and the coming iPhone, Apple is throwing its full weight behind the wireless technology. The company has been a notable holdout on NFC as rivals including BlackBerry Ltd. BB.T -2.22% BlackBerry Ltd. Canada: Toronto $11.44 -0.26 -2.22% Sept. 4, 2014 4:16 pm Volume (Delayed 15m) : 2.75M P/E Ratio N/A Market Cap $6.16 Billion Dividend Yield N/A Rev. per Employee $628,736 09/04/14 Apple Watch to Allow Mobile Pa... 08/25/14 Apple May Sweeten MobileIron's... 08/23/14 BlackBerry Wins Another Court ... More quote details and news » , Nokia Corp. NOK1V.HE +0.62% Nokia Corp. Finland: Helsinki €6.50 +0.04 +0.62% Sept. 4, 2014 6:29 pm Volume (Delayed 15m) : 15.75M P/E Ratio 11.02 Market Cap €24.19 Billion Dividend Yield 4.00% Rev. per Employee €266,889 09/04/14 Apple Watch to Allow Mobile Pa... 09/03/14 Nokia Plans to Unfurl New Mobi... 08/29/14 Angry Birds Chief to Step Down More quote details and news » and Google Inc. GOOGL +0.61% Google Inc. Cl A U.S.: Nasdaq $593.14 +3.62 +0.61% Sept. 4, 2014 4:00 pm Volume (Delayed 15m) : 1.62M AFTER HOURS $592.73 -0.41 -0.07% Sept. 4, 2014 7:59 pm Volume (Delayed 15m) : P/E Ratio 30.13 Market Cap $394.83 Billion Dividend Yield N/A Rev. per Employee $1,321,030 09/04/14 Book Review: 'Curious' by Ian ... 09/04/14 Apple Watch to Allow Mobile Pa... 09/04/14 Google Settles Complaint Over ... More quote details and news » promoted the technology.
Many smartphone makers now equip handsets with NFC chips. It has been slow to catch on as a payment option in the U.S. because many consumers don't see waving a device in front of an NFC reader as an improvement over swiping a credit card, and few stores accept the technology.
Only one in five U.S. smartphones in use include NFC technology, according to Jordan McKee, a senior analyst for mobile payments at 451 Research; the technology is more prevalent in Asia and Europe.
"Apple's entry could be a tide that raises all ships," he said.
The potential uses of NFC technology extend beyond payments. Sony Corp. 6758.TO -1.85% Sony Corp. Japan: Tokyo ¥2,018 -38 -1.85% Sept. 5, 2014 11:30 am Volume (Delayed 20m) : 6.55M P/E Ratio N/A Market Cap ¥2,173.72 Billion Dividend Yield 1.24% Rev. per Employee ¥55,815,900 09/04/14 Apple Watch to Allow Mobile Pa... 09/04/14 LG Sets a Date for Its New Rou... 09/03/14 5 Things To Read Today: Russia... More quote details and news » has added the technology to smartwatches, smartphones, wireless speakers, and digital cameras so they can work together by tapping one another. Apple filed a patent application last year for wireless charging technology using an NFC antenna.
By waving a device in front of a reader, NFC could potentially be used in place of transit tickets, to turn on lights, sync devices to automobile in-dash display software or to download information about artworks at a museum, among other uses. The Clarion hotel chain has tested NFC as a replacement for room keys.
At Apple, the technology also may be useful in its HomeKit, a software system allowing Apple devices to communicate with and control home devices such as network-equipped light switches or smoke detectors.
—Evelyn Rusli and Eva Dou contributed to this article.
Write to Lorraine Luk at lorraine.luk@wsj.com, Daisuke Wakabayashi at Daisuke.Wakabayashi@wsj.com and Greg Bensinger at greg.bensinger@wsj.com
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