Doesn’t it feel like we keep talking about near field communication (NFC) but have few devices to show for it? Well, the hardware is indeed on its way and is already showing up, said NFC chip maker Inside Secure, which said it has shipped 10 million NFC chips so far this year to a number of manufacturers who are building contactless support into a variety of devices.
Inside Secure, which is based in France, has been one of the pioneers in the NFC field and competes alongside NXP with its MicroRead NFC controller and SecurRead secure element chip. The company has struck a number of NFC deals with manufacturers such as ZTE and Research in Motion, which is using Inside Secure to add to its latest Curve and Bold smartphones.
Now 10 million is still a tiny number of NFC chips sold from one provider compared to 468 million smartphones projected to be shipped this year. But it’s a starting point and big improvement over last year and it shows that the market is indeed moving toward commercial rollouts of NFC in more handsets and devices. Next year is when things should take off with NFC with shipments potentially in the hundreds of millions, said Charles Walton, chief operating officer for Inside Secure. It’s not just an NFC vendor saying this, either.
In-Stat on Monday projected NFC shipments will hit 1.2 billion chips by 2015, when it will reach 30 percent global penetration, supporting a user base of more than 375 million people. In-Stat said retailers will start to ramp up their involvement later this year and early next year as they start exploring the marketing opportunities in NFC, which are becoming more prominent than the payments side of the technology, something I wrote about last week.
“As the costs of NFC chips decline, and NFC radios are combined with other chip functions, the cost to integrate NFC into handsets will be outweighed by the benefits,” says Allen Nogee, Research Director for In-Stat. “The growth of combo chips will also allow NFC radios to piggyback on technology that already has significant penetration in the market. For example, Bluetooth radios, which currently have 100 percent market penetration, can be integrated with NFC radios, making the choice to include NFC easy for OEMs.”
Walton said Inside Secure is working hard to get support from other manufacturers. It’s hoping to sell them on the power efficiency of the MicroReader controller and the storage capacity, speed and flexibility of the SecurRead component. And it’s got a compact solution with a small footprint, said Walton.
As I and others have mentioned, it’s important to think of NFC as more than a payment technology. It’s going to be a huge tool in the hands of marketers looking to target consumers with personalized offers and obtain important shopping data on them. And it’s going to be an important way to exchange information as RIM is showing with its BlackBerry Tag, a newly announced social sharing application for NFC-enabled phones. It could also become a replacement for security access cards.
NFC still gets knocks from people who find it’s more of a technology in search of a solution. But as NFC gets embedded in more devices, the applications will come just like it did for Bluetooth. It’s not going to be overnight, but the tide is shifting.
Related research and analysis from GigaOM Pro:
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