NFC TimesThe premier source for news, analysis and commentary on
Near Field Communication and all contactless technology

There was little surprise at Google CEO Eric Schmidt’s announcement Monday that the next version of the company’s mobile operating system, Android, would support NFC.

NFC industry sources have expected the next Android specifications to support NFC, since a number of phone makers are planning Android models with NFC chips inside for 2011.

What was unexpected was that the Google chief would be carrying around an NFC-enabled Android smartphone, ready to talk about the technology’s benefits. Schmidt did just that when he pulled out an unidentified smartphone model at the Web 2.0 Summit in San Francisco. "This could replace your credit card," he was quoted as saying.

The new Android version, 2.3, dubbed Gingerbread, will be out in a few weeks, Schmidt said. Phones supporting the new version would also have to carry an NFC chip, of which many will not. Update: It was unclear, however, whether the NFC middleware specified in the new Android version was specific to chips from one vendor or would support all NFC chips. Rumors have it that the protocol stack and application programming interface or API, supports an NXP Semiconductors chip. Using NFC chips from other suppliers would require more development work. End Update.

It’s a matter of debate whether the phone Schmidt showed is one Google itself plans to introduce, though the CEO was at pains to say there would be no follow-up to the Nexus One Android phone Google tried unsuccessfully to market online earlier this year. Nonetheless, most of the handset bloggers writing about the interview believe the phone Schmidt held up was a Samsung model, calling it the "Nexus S," after Samsung's Galaxy S.

But such Android handset makers as HTC, LG Electronics, Samsung and Motorola are expected to introduce NFC Android models, in part in response to demand from U.S. mobile carriers planning to launch a new mobile-payment service. The Google chief also confirmed that the Web giant is working on applications for NFC, though declined to elaborate.

The enthusiastic endorsement of NFC by Schmidt is “huge news,” said Einar Rosenberg, chief technology officer for NFC application house Narian Technologies. It would be dwarfed, however, by news that Apple was planning to incorporate NFC in its next iPhone. There is no word yet on that.

But EE Times reported that Research in Motion’s co-CEO Jim Balsillie confirmed in a separate Web 2.0 session that at least some forthcoming BlackBerry handsets would support NFC. “We’d be fools not to use it,” he was quoted as saying.

There is increased demand for embedded secure chips in NFC phones, chip vendors have told NFC Times, and the speculation is that smartphone platform suppliers, such as Microsoft with its Windows Phone, Google, RIM and Apple, along with handset makers, such as Nokia, hope to have a say–and in some cases perhaps take a cut of proceeds–from some of the apps downloaded to the phones. RIM and Apple are both mobile platform and handset suppliers.

The control of the secure apps may or may not include payment. Schmidt said Google does not have any deals working with merchants for conducting payment from Android phones, according to the UK-based Telegraph. Google also does not exercise as much control over its apps and operating system as the other companies.

But Google does have a number of employees–by one estimate, 20–working on NFC mobile wallets and other applications, a source told NFC Times. The Web giant could enable payment by credit card companies or merchants or by network-based payment schemes while earning revenue through mobile advertising, say observers.