New NFC Ecosystem and Players Emerge

(Business News & Technology News, 5 Dec 2008)

While the past five years have seen significant work on NFC standardization and infrastructure, there has been little in the way of full-scale adoption.

"What has been lacking is a short-term, realistic view of the potential for NFC in small and targeted rollouts, either by customer segment, bundled application, or regional capabilities," says Jonathan Collins, ABI Research principal analyst. "NFC's benefits are obvious if the technology is ubiquitous; but it will not reach that level of acceptance without a rethinking of the way to engender NFC demand in a piecemeal fashion."

When NFC first emerged as a technology for mobile handsets in 2003, the ability to address extremely broad end-user markets with a simple end user interface namely mobile handsets and payments, as well as multiple other technologies and interactions—was immediately recognized as a significant potential. But despite many trials involving many companies from multiple industries, only one NFC handset is commercially available.

"A new wave of companies and products has emerged, eager to harness the potential of NFC in a range of applications and services that are often quite niche, but that can use NFC today to create value and drive efficiencies," comments Collins.

This staggered start is reflected in the current hardware market for NFC chipsets, with a large percentage of NFC ICs not going into mobile handsets but into other devices.

NFC peripherals and NFC additions to consumer devices are emerging alongside contactless stickers and other interim technologies that will help bridge the gap between NFC's usefulness and the lack of broad availability of NFC handsets; while large-scale operator rollouts remain subject to additional trials and the further development of business relationships enabling support for NFC payment and ticketing services.

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