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Opinion: Is NFC the successor to Bluetooth?

Posted: 23 Oct 2012 ?? ?Print Version ?Bookmark and Share

Keywords:near field communications? RFID? internet of things? Google wallet? smartphones?

When I saw that NXP Semiconductors NV was on a run date to do $1 billion of annual sales revenue in identification, I did a double take.

During the second quarter of 2012, NXP's identification business unit did $234 million sales. That's 21.4 per cent of NXP's total sales in the quarter and up 20.6 per cent on the same quarter a year before. This is a significant part of that identification market is based on near field communications (NFC) technology which builds on radio frequency identification (RFID) technology.

The two technologies between them cover such applications as electronic passports, contactless bank cards, transportation ticketing cards, ID tags for retail, commercial and industrial applications and their readers and mobile applications and NXP claims it is number one in every one of these markets.

According to Alexander Rensink, director of strategic marketing at NXP, the company reckons that in 2012, about 100 million cell phones will ship with NFC. To put it in another way, nine out of the top ten smartphone vendors are shipping NFC-enabled devices and NXP supplies eight out of the nine. This means that NXP has a 90 per cent penetration rate for NXP in NFC-enabled mobile handsets.

Rensink also said that between 2011 and 2016 2.2 billion NFC-enabled devices will ship and the largest sector by far will be handsets. NXP already has its NFC chips designed into 200 smartphones and tablet computers and only about 80 (40 per cent) of them are in volume production.

Nice work if you can get it.

And the big driver for NFC on-board mobile phones is the prospect of using the cell phone for monetary transactions; an application that resolutely refuses to happen.

Rensink is adamant there is a lot more to NFC than just providing a medium of monetary transfer. "NFC can be used in coupling the physical world to the virtual world." He outlines the possibilities: stickers on posters and magazine adverts that users touch their phones to for more information and URLs; stickers on toys and action figures that can enable an online experience based on the physical toy; NFC in white goods and smart clothing.

All these things may be possible but they don't sound like killer use cases.

In fact it is all rather reminiscent of the rise of Cambridge Silicon Radio Ltd. -now CSR plc- on the back of its CMOS implementation of the Bluetooth communications standard.

The similarities are notable. Bluetooth is also a technology standard for exchanging data over short distances. It was invented in the early 1990s by Ericsson and it also quickly became an essential "tick-in-the-box" for mobile phone makers, followed by computer makers.

But to be honest I have never been able to get Bluetooth to work on any of my gadgets and I have never needed to. I suspect a lot of other users have been like me and left their Bluetooth connections dormant. None of this hurt CSR, which kept on supplying the chips.

So is NFC the new Bluetooth? Millions of chips shipped never or rarely to be used.

NXP's Rensink said: "Bluetooth does get used." He adds that NFC is not one application and the Google Wallet initiative, which NXP contributed to in 2011, has moved forward to version 1.5. "Many other payment initiatives are being trialed and rolled out. We are still in the early days." And as he outlined there are many more potential applications to come.

We probably are in the early days?C�of a Bluetooth-style roll out. And if NFC can find a place to play in the Internet of things and wireless sensor networks it may yet come to be useful. But whether it does become useful or not, the volume of chips looks set to be enormous on the back of smartphone volumes alone, where NXP is leading.

All good for NXP until such time as a Broadcom or Qualcomm decides the NFC radio, base band and security should be intergated in with a combo chip or the application processor.

Oh and who is the tenth smartphone company that has not yet designed NFC into its smartphones? A is for?

- Peter Clarke
??EE Times





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