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Near Field Communication and all contactless technology

France-based Inside Secure announced it has shipped 10 million NFC chips this year through Oct. 15 and told NFC Times that most of the chips come stacked with embedded secure elements that could support ID, payment and other secure applications.

Although Inside didn’t mention the names of buyers of the chips in its announcement today, nearly all of the 10 million in shipments have likely gone to Research in Motion for certain NFC-enabled Bold and Curve BlackBerry models and other phones RIM might introduce over the next few months. Inside earlier this year had confirmed it was supplying RIM with NFC chips. 

The chip vendor also has confirmed supply to U.S.-based rugged phone maker Sonim Technologies and has announced it will provide Chinese handset maker ZTE with NFC chips.

“Ten million chip shipments mean 10 million NFC devices,” Inside chief operating officer Charlie Walton told NFC Times. “Some of them are in the market now, some to come.”

Walton said Inside’s NFC chip shipments were accelerating during the fourth quarter, though wouldn’t elaborate. But he acknowledged that total NFC phone shipments for 2011 using chips from all suppliers would come in at fewer than 40 million handsets. That agrees with projections from industry observers that are down from earlier forecasts, as NFC Times reported last month.  

“This is a big, growing, market; it has to go through its paces and steps,” Walton said.  “Getting phones certified by carriers and brands, it takes time. You have to be realistic about that.”

He declined to offer a projection for 2012 NFC chip or phone shipments, but analysts and other observers in the past few months have placed the forecasts at around 100 million.

Inside in its announcement today noted that several major handset makers have already introduced NFC-enabled smartphones and the handset introductions are expected to accelerate in 2012. The vendor also noted that mobile operators, banks and other service providers in the United States and Europe have formed associations or joint ventures “to prepare for NFC rollouts next year.”

Inside uses smart card chips from Germany-based Infineon Technologies for the embedded secure elements stacked with its NFC controller, a package Inside calls SecuRead. The NFC chips also support the single-wire protocol standard, which would enable operators to store secure applications on SIM cards they issue.

Research in Motion is interested in putting corporate badges and other ID applications onto the embedded chips in its NFC-enabled BlackBerrys and may be developing a mobile wallet. So far, RIM has announced basically two NFC models, the BlackBerry Bold 9900 and related 9930 and the BlackBerry Curve 9350 and its close sibblings, the 9360 and 9370.

“You go and put a device out today, these battles about carriers and who will control the whole bit (secure element), is a policy battle,” said Walton. “The flexibility of including the secure element in a phone today for a phone that will be out in the market for the next two to three years makes a lot of sense.”

Inside’s announcement today is the first release of shipment figures for this year by one of the major NFC chip suppliers. Inside competes directly with Netherlands-based NXP Semiconductors, which has announced NFC chip shipment deals with such Android phone makers Samsung Electronics, Sony Ericsson and China’s Huawei. NXP also said it would ship chips for ZTE. And NXP supplies all of the NFC chips for Nokia’s Symbian-based NFC phones.

NXP in August asserted that it owned more than 90% of the market share of NFC chips for phones in the pipeline, but Walton contends that by the end of the year, Inside and NXP would be at “parity” in terms of chip shipments, although that appears unlikely. NXP has said it has more than 70 smartphone models in the pipeline carrying its NFC chips and 10 tablets, though most of these devices will be shipped in 2012.

NXP is declining comment, citing the quiet period leading up to the release of its third quarter results next week.

The NFC chip market soon will become more crowded with such large chip makers as Samsung Semiconductor, Renesas Electronics, STMicroelectronics, Texas Instruments, and most recently, Broadcom, all announcing NFC plans. One or two of these companies, including Samsung, STMicroelectronics and Broadcom probably will be shipping NFC chips in volume before the end of the year, said sources. 

But Inside’s chief rival so far is NXP, and Inside used today’s shipment announcement to tout what it contends is much lowest power consumption and footprint for its chip. Inside said the chip also can do card emulation for EMV payment transactions with at least a 30% smaller antenna than other chips commercially shipping.

Walton said the comparisons are only with the NXP’s chips, including those that run in Google’s Nexus S. He dismissed an announcement last month by large U.S.-based Bluetooth and WiFi chip maker Broadcom that its new family of NFC chips–based on 40-nanometer technology–would slash power consumption by 90% and has a 40% smaller area than any other chip on the market.

“Have them deal with facts, and the fact of the matter is, we’ve ripped apart a Nexus S and ripped apart a RIM (BlackBerry);  we’ve looked at the footprint, we’ve looked at the antenna,” said Walton. “I’d (ask) Broadcom if they know how their product will perform in a commercially shipping device about their power consumption, real estate and performance. What they’ve communicated is a spec sheet on a future product.”

Walton declined to say whether Inside had cracked NXP’s virtual lock so far on NFC chips for Android phones or if it would be a supplier for forthcoming NFC phones running Microsoft’s Windows Phone operating system. He would only say that Inside NFC chips would ship on “new devices that are going to come out in the future on different platforms.”

Even with its purchase of the smart card chip unit of U.S.-based Atmel last year, Inside remains much smaller than its NFC chip competitors. It postponed a planned initial public offering in June, citing the ongoing currency crisis in Europe and has not said when the IPO will be rescheduled.

Inside is the largest supplier of contactless chips by units by virtue of its large market share of low-cost contactless chips for U.S bank cards. It bought the Atmel chip unit in part to supply dual-interface contactless chips for EMV bank cards. Inside is also said to be working on its own embedded secure chip for NFC phones.