Ecosystem Challenges Limit Near Field Communication Prospects in 2008

(Business News & Technology News, 21 Apr 2008)

Execution on the Near Field Communication (NFC) opportunity in mobile handsets is likely to remain largely limited to the trial phase in 2008, despite support from all quarters of the industry, according to the latest research from Strategy Analytics. The shortfall is attributed to the slow ecosystem build-out, a half-hearted effort, at best, even though there is visible progress in overcoming the technical and standardization challenges.

"Unlike other Personal Area Networks (PAN) technologies such as Bluetooth, the success of NFC in handsets is reliant on the ecosystem and the monetization opportunities present for all participants in this value chain. For NFC to be a commercially viable solution, we need to move from isolated field trials to a more open approach as in the most recent trials from Nokia, NXP and VISA," says David Kerr, Vice President, Global Wireless Practice.

According to Bonny Joy, Analyst, Wireless Device Strategies, NFC's prospects have been hampered by conflicts of interest from operators, handset manufacturers and banks and payment processing companies. "However recent technology developments, such as Single Wire Protocol (SWP), as well as single chip solutions incorporating multiple contactless standards, are promising developments and will spur growth in the medium term," says Joy.

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