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NFC and contactless chip supplier Inside Secure reported revenue fell by 12% during the first quarter to just over $34 million, with its ID and banking chip units accounting for the declines.

The France-based supplier reported its NFC chip division had sales of just under $14.2 million for the quarter, mainly to handset maker Research In Motion. While that was up substantially from a year earlier, NFC shipments had only just begun early last year. The Q1 2012 NFC chip sales were down significantly from the $23.3 million in sales Inside reported for the NFC unit during the fourth quarter of 2011.

Inside explained in its short sales report today that it had particularly strong NFC revenue during the fourth quarter thanks to the introduction of several NFC-enabled BlackBerry models from RIM during the latter part of 2011.

The vendor said sales for its mobile NFC unit soared to $47 million last year, just under half of it during the fourth quarter alone.

The Q1 2012 sales results did nothing to help Inside’s flagging share price, which fell another half percent to €5.75 (US$7.55), close to its historic low.

Inside launched its IPO in February for a price of €8.30 and saw its share price climb to nearly €10. But its share price started falling after Inside released its 2011 earnings report in March 30, which showed the vendor continuing to be dependent on the troubled BlackBerry maker for meeting its prediction that it would turn a profit for the first time in 2012.

An announcement April 16 by Inside confirming that it was supplying the NFC chip to Nokia for the first Windows Phone-based NFC handset, the Lumia 610, due out early in the third quarter, resulted in a small spike in the share price.

But the market may consider this a one-off project, since it’s doesn’t necessarily mean Inside will get the contracts for NFC chips when Nokia introduces its expected line of NFC models based Windows Phone 8, Microsoft’s next version of the mobile operating system due out late this year.

Inside also said it earned some revenue during the first quarter from its licensing deal to provide NFC technology to Intel.

The vendor said it earned its first revenue from the Intel deal during the second half of 2011 and indicated it expected to ship NFC chips or chip technology to Intel this year for ultra-thin laptops, though not in large volumes.

Inside does not plan to introduce its SIM card packing a built-in contactless antenna, dubbed NFC Booster, until the third quarter. If it works in market conditions, the booster is a promising product. Inside also plans to launch its own embedded secure element to stack with its NFC chips, but not until the end of this year. This would improve profit margins, since Inside now uses secure elements from Infineon Technologies for its stacked NFC chips it ships to RIM.

In figures previously released prior to the IPO, Inside said it had an adjusted operating loss of just over $16 million in 2011 and a net loss of $14.6 million, both at least twice as much as the respective operating and net losses the company reported for 2010. Inside hasn’t yet finished a year in the black since its founding in late 1995.

The vendor had total revenue for 2011 of $151.5 million, down by 3% from 2010, counting full-year revenue from the Atmel smart card unit.

Inside reported disappointing sales in both its digital security and secure payment units for the first quarter of 2012. Inside ships both contactless and contact chips into these markets.

In the banking unit, sales continue to fall, coming in at only $7.8 million for the quarter, down 57% from the first quarter of 2011, as U.S. banks continue to cut back on orders of simple contactless cards. Inside attributed this to their “anticipation of the future migration to a new EMV-type standard.”

Banking chip revenue had fallen even more in the fourth quarter of 2011 from a year earlier, by 68%, and was down 24% for all of 2011.

Inside also reported a substantial drop in ID chip revenue, to $11.9 million, down 32% from the same period in 2011. The vendor said the falling ID chip sales were partly offset by chips for pay TV cards.

Inside is seeking to generate sales in the anticounterfeiting, smart metering and machine-to-machine markets, which it considers as having the most growth potential for its security unit.