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

Nokia today began shipping its first smartphone with NFC inside, the C7, but the phone requires a software upgrade for the NFC functionality to work, NFC Times has learned.

The touch-screen phone is one of the handset maker’s "new family" of Symbian devices, which it hopes will bring back its troubled smartphone division. Nokia announced today that is has begun shipping the C7 worldwide, which it touts as its "sleek social networking smartphone."

But the handset maker is keeping quiet about the NFC chip inside because of the needed software upgrade. Nokia first announced the phone Sept. 14 along with three others supporting a new version of the Symbian operating system at its annual Nokia World conference in London. That announcement did not mention NFC, either. 

"The reason is that the NFC software is not ready yet on the devices," a Nokia spokesman told NFC Times today. "We didn’t want to postpone the whole device announcement because of the software upgrade."

Even when upgraded with the software needed to turn on the NFC functionality, it's unclear how much support the phone will have for secure elements, which would enable the C7 to be used for contactless payment. Nokia appears to be planning to emphasize NFC's tag-reading features with this phone–not card emulation–perhaps to enhance the social networking applications.

But without a secure element, the phone could not do credit or debit payment or secure ticketing. The phone is not shipping with an embedded secure chip, but some sources said they believe telcos could order the handset with support for a secure element, such as on SIM cards using a standard single-wire protocol connection to the NFC chip. Another source said it also might be possible to support the secure chip on a microSD card.

The Nokia spokesman could not say whether the phone would be able to support secure applications. He also declined to speculate when the NFC software upgrade would be available, though indicated it might be possible to upgrade phones already in the field. The upgrades could be available in coming weeks, NFC Times has learned, at least to enable the phone to work in NFC reader mode and possibly for peer-to-peer communication. 

One source told NFC Times he thought the problem was that the NFC middleware in the phone does not support the newer version of the NXP Semiconductors NFC chip in the phone. The middleware or protocol stack supplier might be a contract developer hired by Nokia. If the middleware is the problem, it could probably be upgraded over the air to handsets already in the field, said the source.

While the delays in the NFC functionality and uncertain support for secure elements will no doubt disappoint mobile operators and service providers eager for NFC phones to hit the market, the fact Nokia is putting NFC chips in one of its premier devices bodes well for future support by the world No. 1 handset maker.

Besides the C7, Nokia also announced the lower cost C6, as well as the E7 business smartphone, at Nokia World. It also promoted the previously announced flagship N8 smartphone at the event, which has already begun shipping. Of the four phones, only the C7 packs an NFC chip. Anticipation had run high that Nokia would announce an NFC smartphone at Nokia World. 

Meanwhile, other smartphone makers are preparing to introduce NFC phones, with three to four models supporting Google's Android operating system expected by the first quarter, a source with knowledge of the handset makers' plans told NFC Times. A couple of the Android devices might be available, at least for testing, before the end of 2010. These also might support an additional secure element, depending on operator preferences.

While the NFC features are not yet available, the release of the Symbian-based C7 with NFC inside is ahead of the schedule Nokia had set for the start of shipments of Symbian phones supporting NFC. Top Nokia executive Anssi Vanjoki last June disclosed that all new Symbian phones starting in 2011 would support NFC. Vanjoki, who was passed over by Nokia when it appointed a new CEO last month, abruptly submitted his resignation as executive vice president for mobile solutions just before the Nokia World conference.

But despite the recent shakeup of its top management, Nokia executives, including the new CEO Stephen Elop, reaffirmed their commitment to NFC in their Symbian line of smartphones, according to an NFC industry source, who said he questioned the executives at Nokia World. He quoted Elop as saying, "Yes, (NFC-based) mobile payment is quite important to us."

And sources close to Nokia said any new smartphone to be launched soon would just be part of a larger move to NFC by the Finland-based handset maker. The strategy is also to support the single-wire protocol standard in the phones, which would enable the SIM to carry secure applications, said one of the sources.

While the new Symbian^3 operating system doesn’t support NFC natively, "it is, of course, perfectly possible for a device manufacturer to implement NFC support in a handset based on Symbian^3," said a spokeswoman from the Symbian Foundation, which manages the open-source operating system. Symbian is Nokia’s preferred platform for smartphones. The NFC upgrade to the C7 would tie into the new Symbian version. 

Still, Nokia is saying little publicly about its NFC plans and neither are other handset makers.

GSM Association Queries Phone Makers
The continued lack of phones supporting the technology prompted mobile operator trade group the GSM Association to convene a meeting last month in Vienna, inviting the major handset makers in order to ask them, in effect, "When will we see the NFC phones?" The association held the meeting around the time of its latest Pay-Buy-Mobile project meeting. That project seeks to promote introduction of NFC-based m-payment services with applications stored on SIM cards. The association launched the project in early 2007 and later called on handset makers to introduce full NFC phones by mid-2009, to no avail.

The GSM Association declined to comment on the meeting with the handset makers, held on or around Sept. 22, but one mobile operator representative in attendance told NFC Times that all or most of the major handset makers, including Nokia, Samsung and LG, were in attendance, as well Research in Motion, manufacturer of BlackBerry smartphones. IPhone maker Apple did not attend.

Some of the handset makers attending the meeting confirmed that NFC is definitely in their roadmaps, while some declined to reveal their plans, said the telco source, who declined to name the phone makers confirming their NFC plans.

But as NFC Times has reported, besides Nokia, Samsung, LG and HTC are planning NFC handsets for next year, especially those supporting Google’s Android operating system. Motorola is also likely to have at least one Android NFC model on the market, probably in response to demand from U.S. mobile carriers planning pilots to test NFC mobile wallets. RIM and Apple are also working with the technology, with anticipation running high that the iPhone 5 will pack NFC.

NFC Chips 'in the Millions'
Rémy de Tonnac, CEO of NFC chip supplier Inside Contactless, said that unlike the disappointments of past years, when internal forecasts for shipments of NFC chips had to be revised steadily downward, the company’s sales managers this fall are revising their projections for shipments upward. That is compared with their forecasts only six or nine months ago, de Tonnac told NFC Times.

“For the first time, we (expect) shipments of NFC chips to OEMs (manufacturers) over the world to be in the millions,” he said.

Of those millions of chips de Tonnac expects Inside to ship in 2011, about two thirds would be destined for full NFC phones, while the remainder would be used in such bridge technologies as SIMs or SIM overlays with flexible antennas. The chips for the bridge technologies would also be full NFC chips, including support for reader mode, he added.

But Inside chips would not be used in the C7, since Inside is not a supplier to Nokia. 

Nokia's introduction of NFC in the C7 is a dramatic change from the dowdy, mid-tier, phones the handset maker had incorporated NFC in before, such as the 6131 and 6212.

Among other features, the C7 will sport a 3.5-inch screen, high-definition video, full GPS navigation and 8 gigabytes of internal memory, plus support for microSDs of up to 32GB. The phone will target users of social networks, who will be able to get live updates from Facebook and Twitter directly on the home screen and could update their status directly across all social networks at the same time.

Though not as large as the app stores for Apple’s iPhone or Android, C7 users will be able to choose from among thousands of applications in Nokia’s Ovi store, said Nokia.