Affordable NFC Phones Coming to Market

The story of NFC handsets for 2011 is shaping up to be one of lower-cost phones.

As the first wave of NFC-enabled smartphones start to appear this fall–following the release of Google’s Nexus S released late last year–there is now little doubt that entry-level or lower-end models will be available. That will include models from Nokia and Research in Motion, as well as a few Android handsets from Asian phone makers.

Nokia and RIM had back-to-back announcements in late August of starter smartphones supporting the latest Symbian version, called Belle, and the BlackBerry 7 operating system, respectively. Nokia’s trio of new phones, the 600, 700 and 701, start at an unsubsidized €180 (US$253.64) and could begin shipping this month.

RIM, a day later, unveiled three related NFC versions of its entry-level BlackBerry Curve, the 9350, 9360, 9370. The models, which were to debut in Canada in August, will be available elsewhere starting this month. U.S. mobile carrier Sprint said it would introduce one of the new Curve models, the 9350, this week for $79 with a two-year contract.

At the same time, NFC-enabled Android phones from Asian phone makers are beginning to appear.

An affordable Android device from China-based vendor Huawei, the U8650NFC, launched in Turkey this summer, brought to market by telco Turkcell under its T20 brand. Turkcell subscribers pay an unsubsidized price of about €200. Huawei is expected to ship the phone elsewhere.

I’m told that Taiwan-based computer and smartphone maker Acer is showing samples to some service providers and probably some telcos of a sub-€200 Android NFC phone. And Chinese phone maker ZTE is working on low-cost Android models, among other NFC phones.

In addition, HTC is releasing its first NFC-enabled Android phone in China, in partnership with payment-card network China UnionPay. UnionPay will put its contactless application onto specially designed microSD cards that work in the full NFC phones. The handset, known as the Stunning in China, is expected to be priced to sell by the handset maker, especially since Chinese telcos will not subsidize it.

Samsung Aug. 30 also announced an entry-level smartphone supporting the handset maker's own bada operating system, the Wave Y. Like the mid-tier Wave M, announced at the same time, and earlier Wave 578, Samsung is making NFC optional for operators ordering the feature. LG Electronics in July announced a lower-end Android NFC phone, the Optimus Net.

These affordable smartphones are coming in addition to a few even lower-cost NFC feature phones that are appearing this summer. One is the follow-up to the Samsung S5230, called the Player City in France. It retails for about €1 with a contract there. And there’s also a low-cost T530 from LG.

High-End Handsets in Holding Pattern
Meanwhile, there are a few phones considered in the high end of the smartphone range on the market, namely Nokia’s C7–only recently enabled for NFC with a Symbian upgrade–and RIM’s BlackBerry Bold 9900/9930 models.

Both come with NFC as a default feature. But the C7 cannot support payment or other applications on secure elements, even with later software upgrades, NFC Times has learned. Telcos are not activating The NFC functionality yet on the Bold models, which do support one or more secure elements.

There is also the high-end Nexus S 4G, which Google and partners have slashed in price, ostensibly to sell more units in the run-up to the launch of the Google Wallet.

Samsung is building this phone for Google. For its own handsets, Samsung is waiting for mobile operators to order the phones with NFC inside.

That’s why the phone maker is not yet shipping the NFC version of its high-end Galaxy S II. Mobile operators are still building their mobile wallets and business relationships, and have apparently been unwilling so far to pay the extra cost for the NFC chips and software integration in the popular model.

For the same reason, most telcos are generally not activating the NFC functionality in phones they are buying from RIM, which, like Nokia, is expected to make NFC a default feature in many or most of its future phones.

High-end NFC devices are not expected to come from Apple this year, either. And Nokia and Microsoft will wait until next year before embedding NFC in any Windows phones.

But some high-end NFC handsets are likely to be shipped before the end of the year, such as the Galaxy S II in certain markets. The NFC version of the phone is already reportedly being sold in South Korea. In addition, Google is expected to launch a follow-up to the Nexus S, dubbed the Nexus Prime, before the end of the year.

LG, Sony Ericsson and HTC are working on other NFC phones, possibly high-end and perhaps pegged for release this year. And a source told NFC Times RIM has been talking about including NFC to its Torch series, though RIM’s announcement of new Torch models 9810, 9850 and 9860 in early August did not mention they would support NFC.

The preponderance of lower-end NFC phones is not a bad thing. More consumers can afford them, and the phones can do tag reading and peer-to-peer applications now.

And these phones could be upgraded to support payment later. The new Nokia Symbian phones will come with a single-wire protocol hardware connection built-in. With an over-the-air software upgrade, probably available during the first part of 2012, the phones will be able to support payment applications on SIM cards. That excludes the C7, which may not have the proper antenna configuration for payment.

RIM’s NFC phones are believed to be shipping with embedded chips and also support for the single-wire protocol.

But it will take a while for telcos and service providers to ready themselves for payment, ticketing and other high-profile applications. Even Google, with a concerted effort to launch its wallet before the end of the summer, is meeting with delays.

Larger NFC rollouts are expected in 2012. By that time, there should be a greater range of handsets on sale, including more high-end devices with their NFC features fully activated.

With the infrastructure of contactless readers and tags still sparse in most places, perhaps it is better not have too many highly touted phones in the market too soon, since there are as yet few places for consumers to tap them.


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