Good question. I suspect both.Still less than an inch. This does mean you could be more clumsy and still get a good read, though.
I wonder if new NFC hardware is required on the phone and device side or just the phone side.
At least now I may know why my cased phone generated read errors trying to trigger the pad at the pharmacy yesterday, while my actual card worked fine when right over it; I probably held the phone further away than .2 inches