The ‘NFC World Congress’? Not Quite, but the Buzz is Back

Some were calling it the "NFC World Congress" last week in Barcelona, but when all was said and done, handset makers announced just two NFC-enabled models at the huge Mobile World Congress trade show. 

Both phones were from Samsung Electronics­­–the Android-based Galaxy S II, the follow-up to the phone maker’s flagship Galaxy S; and the Wave 578, a mid-tier smartphone running Samsung’s own bada operating system. Rumored phones from LG Electronics, Research in Motion and HTC didn’t materialize at the event.

Still, the buzz was back on NFC following the industry hype of a few years ago. This time, however, there is much more to it than hype. Besides renewed endorsements of the technology by the chiefs of Google and RIM, two of Europe’s largest operator groups, Deutsche Telekom and France Telecom-Orange, made important NFC announcements during the show.

Deutsche Telekom announced it would roll out NFC and mobile wallets in its four largest European markets starting this year, including Germany, where it will launch its own payment scheme at the physical point of sale using NFC phones, NFC Times has learned.

Orange based its MWC announcement around the Samsung Wave 578, promising to have it in Orange shops in Spain, Poland and in its home base of France starting in the second quarter. And it said more handsets, including those from LG and Nokia, would follow. And more Orange branch operators would also introduce NFC. Moreover, Orange again went on record with its pledge that more than half of all new smartphone models to hit its store shelves in Europe by the end of this year would support NFC.

Both Deutsche Telekom and Orange have made NFC a required feature on phones they order–provided an NFC version of the model is available from the handset maker. And in announcing their NFC programs, they are signaling to prospective service providers that a growing number of consumers will have phones in their pockets. They are also sending a message to handset makers that demand is strong in Europe for NFC phones, especially those that support contactless applications on SIM cards.

LG, RIM, Nokia, HTC–Ready, but Apple?
Anne Bouverot, executive vice president for mobile services for Orange, told me at the show that she expects other NFC phones this year from such major manufacturers as LG, HTC and Nokia, along with BlackBerry models from RIM.

Of note, however, is a comment Bouverot made during an overflowing NFC conference session on the last day of the Mobile World Congress, in which she said she was not so sure the iPhone 5 from Apple, due out this summer, would come with NFC inside. She told me after the session she was less likely to believe the next iPhone would be NFC-enabled than she was at the start of the mobile confab in Barcelona, but wouldn’t say why. 

It's hard to say whether Bouverot talked to anyone in the know. There remains much anticipation that Apple will adopt NFC this year, and it appears even more likely now that its chief rival, Google, has embraced the technology for its Android smartphone platform. But as one mobile industry executive speculated to me, Apple is more concerned that the technology it adopts for its devices has the maturity to yield a superior user experience than with being an early adopter. We’ll know around June whether Apple believes NFC is mature enough to be included in the next iPhone.

New Certification Scheme by Telco Group?
: The GSM Association, the trade group behind the Mobile World Congress, followed up today by announcing that at least 16 major mobile operators, including Orange, Deutsche Telekom and Vodafone, but also telcos in high-growth developing markets, such as China Unicom, América Móvil in Latin America and India's Bharti Airtel, have "voiced their commitment" to NFC and plan to launch NFC commercially, at least in selected markets, by 2012.

The real purpose of the release might be to emphasize that the telcos in the big GSMA trade group plan to roll out NFC with secure applications stored on SIM cards–which underpins the NFC business case for many of the operators. Given that many handset makers are planning to put embedded secure chips in their NFC phones that could store applications out of the control of the telcos, the association might want to emphasize its long-standing push for the SIM as secure element.

In its announcement, the group said it would develop certification and testing standards to insure interoperability of NFC services. The certification program–if it goes forward–would apply to SIMs and phones, according to the GSMA, and would start on a country-by-country basis. How it would work with a separate certification scheme for NFC phones and other devices launched by the NFC Forum trade group remains to be seen. End update

In any case, there is little doubt that other major smartphone makers are planning to run with NFC starting this year. NXP Semiconductors, supplier of NFC chips to Samsung; and Inside Secure, NFC vendor to RIM; are sticking with their projections of last fall that NFC handset shipments will reach 50 million to 70 million this year. This takes in phones from all NFC chip suppliers.

NXP: After Eight Years, Things are Looking Up
NXP’s CEO Rick Clemmer told Forbes during the Mobile World Congress that the chip maker shipped a total of only 1 million NFC chips over the eight years between the time it announced the technology with co-creator Sony Corp. in 2002 and September 2010. But Clemmer said NXP shipped "three to four times that amount," during the last three months of 2010 alone. That is when Android handset makers started gearing up for NFC. Google’s Nexus S, made by Samsung and now on the market, uses an NXP chip.

The company will ship a lot more chips this year, with a number of other Android phone manufacturers expected to use NXP's NFC chips. Google adopted NXP’s NFC phone software for its latest Android operating system, Gingerbread.

NXP, Inside and a growing number of other NFC chip suppliers, such as Samsung Semiconductor, are in volume production of NFC chips or soon will be. They will be shipping to just about all of the major handset suppliers.

The fact that more of the phone makers didn’t announce NFC models at the Mobile World Congress–the world’s largest mobile industry trade show–likely means that many of the models will not be ready for a while. Both of the Samsung NFC models announced at the event are due at mid-year, though a Galaxy S II version without NFC may be on the market in April.

But a variety of other NFC phones are on their way to shops this year. In fact, one difference I noticed at this year’s Mobile World Congress expo is that I could generally walk up to exhibitors with the major handset makers standing around their display cases and ask if they had an NFC model to show, and they would tell me the technology is coming.

Last year, when I asked the phone exhibitors at random if they had NFC, most didn’t know what I was talking about.


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