Walton to Depart Inside Secure to Head Canadian Security Company
The top NFC executive at struggling chip maker Inside Secure, Charlie Walton, has left the company after seven years to become CEO of Canada-based SecureKey Technologies.
France-based Inside named Pierre Garnier, former vice president and general manager of Texas Instruments' worldwide baseband business, to replace Walton. Garnier will also head Inside’s Secure Payment division, which Walton has done.
Walton’s departure comes at a bad time for Inside, which has seen its share price plummet since its initial public offering in February on continued losses and its reliance on business from troubled handset maker Research In Motion.
Walton and Inside have worked with SecureKey on technology that enables users to tap contactless cards and NFC phones to authenticate themselves for purchases on smartphones, tablets, laptops and other devices. The devices could act as point-of-sale terminals for payments and also could enable users to tap contactless cards and NFC phones to authenticate themselves for e-health and e-government applications.
SecureKey announced in May it had raised $30 million from the venture capital arm of Intel Corp., along with funding from major payment networks, among other investors, to commercially roll out the technology, which doesn’t always involve a contactless component.
SecureKey is a supplier for Intel’s Identity Protection Technology, which offers a type of two-factor authentication that would be much more secure than the usernames and passwords consumers enter on most shopping sites, such as Amazon. It could offer the potential for consumers to make purchases over the Internet, but without the card-not-present risks and higher merchant transaction fees that come with them.
Intel plans to incorporate the technology in chips with a contactless interface for ultra-thin laptops, which it calls Ultrabooks, later this year.
Visa Inc., MasterCard Worldwide, Discover Financial Services and Canadian telcos Rogers Communications and Telus also participated in the $30 million funding round.
Walton: Departure Not Linked to Inside's Finances
Walton told NFC Times his departure from Inside had nothing to do with the chip supplier’s financial performance. He will start at SecureKey in August but will serve on Inside’s advisory board.
Walton said he has known SecureKey’s present CEO, Greg Wolfond, for several years.
“The CEO opportunity was something I could not refuse,” he said. “So, the decision was purely made from the great opportunity offered–and a very good match for my background.”
Walton has served 30 years in the mobile, Internet and contactless security business. He joined Inside in August 2005 and built its contactless chip business for Visa and then MasterCard-branded credit and debit cards.
He was later also given oversight of Inside’s important NFC unit. Philippe Martineau, who headed the unit, then reported to Walton. Martineau left Inside in May after more than six years with the company to become vice president for business development in Europe for U.S.-based DeviceFidelity.
Inside raised about €70 million in its IPO in February, and its share price later reached a high of nearly €10 (US$12.31) in March, but has since fallen sharply, and closed down a little more than 3% to €2.86 today.
The company, which doubled its net loss to $14.6 million last year, saw revenue fall by 12% during the first quarter of 2012 to just over $34 million.
Results for the second quarter, not yet released, are expected to come in even lower, increasing pressure on CEO Rémy de Tonnac.
Steep Challenges Ahead for Garnier
Garnier will begin work next month as executive vice president of the NFC and Secure Payment divisions.
He will be charged with seeking to crack the dominance of the Android NFC chip market held by rival NXP Semiconductors while winning business for planned NFC handsets supporting Windows Phone 8–though NXP is also expected to have the first contracts to supply NFC chips for these devices.
He will also seek to introduce Inside’s “NFC booster” product, which gives a contactless interface to SIM cards, which could then store payment and other secure applications and be used in non-NFC phones, said Inside.
And Garnier will try to capture market share for dual-interface and contact chips for EMV banking cards to be rolled out in the U.S.
Besides overseeing the mobile baseband business for TI, Garnier, who has been based in Nice, France, has also been responsible for the chip maker’s contracts with handset makers Nokia and Sony Ericsson, now Sony Mobile.