Research Firm Increases NFC Phone Forecast on Heels of Isis Shift

The decision by U.S. mobile carriers to agree to work with established payment networks for their NFC rollouts and give up plans for their own Isis brand payment scheme will boost the market for NFC phones through 2015, when nearly 550 million phones are forecasted to be shipped, market research firm IHS iSuppli said today.

The Isis venture, made up of AT&T, Verizon and T-Mobile USA, earlier this month confirmed it would work with Visa Inc. and MasterCard Worldwide for planned NFC rollouts in the United States. Isis had originally intended to introduce its own payment brand at the point of sale, using the rails of the Discover Financial Services retail network. Barclaycard US would serve as the first issuer.

“By partnering with the dominant players—Visa and MasterCard—the wireless carriers are making the right moves to create an ecosystem that will allow consumers to become comfortable with making NFC payments through their cell phones,” said Jagdish Rebello, director and principal analyst for communications and consumer electronics with IHS, in a statement today. “Such a move will drive an increase in unit shipments of cell phones with embedded NFC capability in the United States and around the world.”

He said this shift, combined with Google’s continued plans to promote NFC technology in Android smartphones, caused the firm to revise its forecast upward for global shipments of NFC-enabled mobile phones.

IHS, which last fall acquired research firm iSuppli Corp., now projects that 93.2 million NFC phones will be shipped worldwide in 2011, up from 79.8 it forecast last December. It nearly doubled its projection for NFC phone shipments for 2014 to 411.8 million, up from 220.1 million before.

Shipments then would increase to 544.7 million in 2015. That would represent just over 30% of all mobile phones shipped in 2015, projected the firm.

Richard Clemmer, CEO of major NFC chip supplier NXP Semiconductors, said last week that NFC phones shipments could approach 100 million this year if Google’s rosy expectations for sales of NFC-enabled Android phones come to pass. But he also said NXP was sticking with its projection for now of 70 million NFC phones on the market this year from all chip and handset suppliers.

Other research firms have also weighed in recently. Berg Insight forecasted that that 24% of mobile handsets sold in 2015 will support NFC, which it estimated would amount to 400 million phones. And UK-based Juniper projected shipments of NFC-enabled smartphones would reach 20% of all smartphones by 2014, which the firm said would equate to 300 million phones.

U.S.-based Pyramid Research last month projected that nearly 28% of smartphones sold in 2015 would support NFC, which the firm estimates would amount to 250 million units.


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