Is NFC Cool Enough to Finally Take Off?

NFC-enabled mobile payments have arrived in the United States. Isis, a joint venture between AT&T, Verizon and T-Mobile, has launched its mobile payment service in Austin and Salt Lake City. Isis payments can be made and offers redeemed by using a secure element SIM and the Isis Mobile Wallet application. Isis has flown under the radar recently as its trial launch was delayed from this summer. While tapping a phone to a payment terminal seems like the next great thing to us here in the US, in fact NFC is in use around the world for payments, and we are belatedly joining the party.

Near Field Communication, or NFC, is a short-range wireless communication technology. The "coolness" factor is very high, and the technology has been proven for years, yet it has failed to gain much traction. It may be on the verge of exploding, however. Semico Research has just released a report, NFC: Security at Hand, that covers what the technology is, what competitors it has, who the major players are in the market, and what the major target applications are.

NFC is somewhat unique in the wireless space, in that the two devices that need to communicate must be very close to each other, or even touching, in order to do so. It fulfills a niche in that it requires very little power and is ideally suited to "tap and act" applications, enabling hundreds of new use cases in the mobile arena.

There are two pieces to an NFC solution: a reader and a tag. A tag simply contains information (like a phone number or website) or an instruction set (launch this app and turn the volume up). A tag's information is written onto it when it is created, and then the content is usually locked so that it can be only read thereafter.A reader can read the information on the tag and then carry out the action called for by the tag, such as launching a web site or storing a phone number in the contacts list.

NFC is currently offered as either a system-in-package (SiP) or embedded into wireless combo chips. Major players include NXP, Inside Secure, and Infineon. NFC solution providers with a smaller market share include MStar, Renesas, Samsung and STM.

"Mobile payments are the biggest growth driver for NFC," said Semico senior analyst Adrienne Downey. "The adoption rate for high end phones in 2013 is almost 30%, and NFC enabled phones will grow from just over 50 million this year to over 2 billion by 2016." Moreover, the TAM for the NFC market will grow to almost 14 billion units by 2016.

Tables in NFC: Security at Hand detail the TAM for selected NFC-enabled products, as well as the adoption rates and the market size for these devices. Contact Rick Vogelei at rickv@semico.com or 602-997-0337 for more information.

The following companies are included in this report:

3Alogics
Accumulate
ACS
Adamsoft
Advanced Card Systems
Allami Nyomda
Allion Test Labs
American Express
ams
Applus
Assa Abloy
AT&T
AT4 Wireless
Athena Smartcard
Avery Dennison RFID
Bank of America
Barclaycard
Bell ID
Blackboard
Broadcom
Bureau Veritas ADT
Cambridge Silicon Radio (CSR)
Canon
Cardolution
Cassis International (Morpho)
Cheng Loong
China Mobile
China UnionPay
Chunghwa Telecom
Clear2Pay
ClikGenie
Communications Global Certification
Comprion
Constratus
Consult Hyperion
Cresco ID
Crosscliq
Dai Nippon Printing
Datang Telecom
Deutsche Telekom
DeviceFidelity
Dialog Semiconductor
Discover Financial Services
DNB Bank
DUALi
Eastcompeace
FIME
Firethorn Mobile (Qualcomm)
First Data
foursquare
Fujitsu
Gamma Solutions
Gemalto
Giesecke & Devrient (Venyon)
GN Netcom (Jabra)
Google
Hayato Information
HID Global
Hitachi
HO Tech
HP
Hrvatski Telekom
HTC
Huawei
I/O Interconnect
iCTK
ID Tech (Vivotech)
Identive NFC
Identive-Group
identytag (Waldemar Winckel)
IDT
i-Free
Infineon
ING Bank Slaski
Inside Secure
Intel
Isis
ITN International
iZettle
Korea Testing Certification
Kovio
LEGIC Identsystems
Leonhard Kurz
LG
Love is Touch
MagTek
Marvell
MasterCard
Mediatek
mFoundry
Micropross
Microsoft
Mikron
Mirano Systems
MStar
MtekVision
Narian
NatWest
NEC
NEXPERTS
NFC Wireless
NFCstuff
Nokia
Nordic Semiconductor
Novatec
NTT Docomo
NXP
Oberthur Technologies
Obopay
OpenWays
Original1
Panasonic
Paybyphone
PayPal
Polar
Posiflex Technology
Project Oscar (Orange, Vodafone, Telefonica, T Mobile, O2)
Proxama
Raisonance
RapidNFC
Renesas
Reslink Solutions
Revel
RFI Global
Ricoh
RIM
Rogers Communications
Rohde & Schwarz
Samsung
Samsung SDS
SanDisk
Sasken
Saxa
Sequent Software
SGS
Sharp
SimpleNFC
SK C&C USA
SKIDATA
Smartposter
SMARTRAC (UPM RFID)
Soliatis Card Solutions
Sony
Sony
Sporton International
Sprint
ST
StarHub
Stollman
Sunward Telecom
TA Technology
TagMyTail
Tagsquared
Tapit
Tappy
TazTag
TCL
Telecommunication Metrology Center
Telefonica
Telenor
TI
TIMWE
Toppan Forms
Toshiba
Touchanote
TrustNorway
TUOMI IT SA
UAB Mokus
UKC Electronics
Validity Sensors
Verifone
Visa
Vitec
Watchdata
WhileOnTheMove
Winter
WyWallet (Telia, Tele2, Telenor, 3)
XAC Automation
Yulong Telecommunication
YunNFC
Zebra Technologies
ZTE