NFC (Near Field Communications) can learn from the mistakes made with Bluetooth and may even surpass it. Presently NFC's primary application is for ticketing where it competes against mobile bar codes. Its ability to utilise existing infrastructure and RFID tags is a major advantage. As a payment method, however, it lacks standardisation.
 

The cellular network industry finally appears to have learnt from its past mistakes when introducing any new technology. It's now obvious that such technologies must be simple to operate. So, what could be simpler than touching a mobile phone against a bright white button mounted on a turnstile in order to gain paid entry to a soccer match? That's not science fiction either -the technology already exists and has been proven for just such an application. Which is exactly why there's so much interest currently being shown in NFC (Near Field Communications) – the latest development in contact-less technologies for mobile phones.

A big question mark, however, still hangs over how quickly NFC– just like Bluetooth before it, can reach critical mass.  There's also disagreement over exactly which applications will drive NFC's widespread adoption. ABI Research has recently predicted that around 50 per cent of mobile handsets will support NFC by 2010. The company also maintains that by 2007, while the highest volume deployments of NFC will have taken place in mobile handsets, other kinds of consumer electronic devices - such as PCs, set-top boxes, digital cameras and printers - will swiftly follow suit. Theoretically the roll-out of NFC should be faster than Bluetooth.

One simple explanation for NFC's widely predicted rapid rise is that it is based on existing standards and existing technologies in the shape of RFID (Radio Frequency IDentification). It can also boast the support of diverse key players across several industries. The founders of the relevant industry body (the NFC Forum) include: - handset vendors such as Matsushita (Panasonic), Samsung, Sony, Nokia, and NEC; chip manufacturers like Renesas, NXP (formerly Philips Electronics), and Texas Instruments; MasterCard and Visa International the credit card companies; plus H-P and Microsoft, of course.

The NFC Forum's output has been impressive. It announced NFC's foundation architecture back in June 2006. The Forum's first four technical specifications then  became available for public consumption by the following August and its specification for the 'SmartPoster' was released by October. The motivational force behind the technology is that when an NFC- enabled devices pass close to a compliant RFID tag, that device is able to read and assimilate the associated information wirelessly . This has led one specialist supplier –chip provider, Innovision – to divide NFC's key applications into three categories. The first category is for payment and ticketing where it will duplicate the success of the 'Oyster' payment card which is used by British consumers to pay for journeys by touching the card against barriers on London's public transportation system.

The world's first commercial deployment of NFC actually took place back in April 2006 in conjunction with the Rhein-Main-Verkehrsverbund (RMV), a regional public transport authority for Frankfurt Rhine-Main in Germany. The project utilises Nokia 3220 handsets with NFC technology integrated into a special battery sleeve. The mobile phones can not only be as electronic bus tickets, they can also act as loyalty cards for discounts at local retail outlets. In Britain, NFC has been tested by 500 soccer fans at the Manchester City Football ground – again using Nokia 3220 handsets. The trail employed existing software developed by Fortress GB which was rapidly modified to work with NFC.

"We re-engineered our software to work with the handset's NFC chip," explained Richard Pinnick, head of International business development with Fortress GB. "All the applications that the fan uses in the stadium - ticketing, access, loyalty and contact-less payments now reside on the NFC chip in the phone. We've also built an interface between the NFC chip and the mobile phone's memory to enable OTA (Over-The-Air) ticketing."

The second major area for NFC will lie with what Innovision calls 'service initiation'. For example, an NFC compliant tag could be buried in an advertising poster or hoarding. The tag can then be read by a mobile phone which automatically fires up its WAP browser and takes the user to a site where pop videos can be purchased. The third area comprises of 'peer to peer communication. If two business people want to exchange business cards, they simply touch the phones together and the relevant data will be transferred via Bluetooth.  With NFC there are no complexities. No need for the handsets to scan the vicinity to search for the other person's handset. Plus the risk of establishing a connexion with a rough device is removed.

Presently there are only a handful of NFC compliant handset available from the likes of Samsung and Nokia. Motorola recently acquired Symbol whose RFID expertise might well be modified for NFC. Samsung demonstrated NFC working on an SGH-X700 at 3GSM Barcelona 2006. Lauri Pesonen, head of NFC consumer solutions at Nokia Ventures couldn't confirm when we might expect Nokia to ship a handset with NFC completely integrated rather than contained in a sleeve.  However, he did reveal how Nokia was able to ship its NFC compliant sleeve for the 3220 a few months before the standards were officially completed. The reason was that the NFC handsets were compliant with existing ticketing infrastructure based on long-standing ISO standards. "These things don't happen overnight," Pesonen said, "But NFC does have a strong value proposition."

Asked when NFC might become widespread within handsets, Peronen argued that the bill of materials required to add NFC will fall rapidly once momentum builds behind it. "It depends on all the stakeholders involved – the banks and the transportation companies as well as the operators and the handset manufacturers getting behind it.” He quoted research by Strategy Analytics which says that 39 per cent of phones will offer NFC by 2010. That equals an installed base of around 500 million handsets.

Operators themselves are taking a cautious approach to NFC. "We're not planning to roll out NFC rapidly," Russ Shaw, capability and innovation director with O2, confirmed. "We're waiting for feedback from customer experience before going ahead." The company intends to test out the technology next year at The O2 (formerly the London) Dome. It will be used to provide trialists with access to the O2 Blue Room (VIP lounge) for example. NFC tags will also be embedded into posters and on special pedestals. "Venues will like NFC because consumers won't have to fumble for cash to pay for a beer in the interval," added Mary Carol-Harris, product development manager with O2.

For ticketing purposes bar codes could be deployed instead of NFC tags. Cedric Mangaud with mobile phone bar code specialist, Abaxia, doesn't see his company's 'Mobile Tag' technology as competing head-on with NFC. "In Japan and Korea operators are already using both bar codes and NFC, because they are complimentary," he explained. "The only real overlap I see is in the area of outdoor advertising and within some product applications." He argues that putting an NFC/RFID tag on a bottle of water is never going to be as inexpensive as putting a bar code/Mobile Tag on it.  Mangaud admits that NFC has one major advantage over bar codes – security. "If RFID tags are allied to an application that utilises the handset's SIM card – then that's the best form of security you can have," he conceded. "Eventually once NFC is built as standard into every mobile phone, you'll use it as the key to your home."

 "Our main concern with NFC technology today for is the lack of standardisation. We believe that mobile NFC has the business potential to be as big as GSM," said Cédric Nicolas, handset and SIM design and development director with Bouygues Telecom. "The main problem is space inside the phone to store and manage applications shared by multiple service providers. And in order to have a seamless user experience, deployed readers should immediately recognise if the phone has the right application in it, and if the user is allowed to use it. This requires a central management of applications."  Bouygues Telecom is therefore urging that the European Commission should very quickly promote and support standardisation. "Our fear is that Mobile NFC will take years to be a reality for the mass market if no such initiative is taken," Nicolas said.

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The NFC technology
NFC operates at a frequency of 13.56MHz and has a range of just a few inches (around 20 centimetres). Currently NFC offers data transfer rates of 106kbit/s, 212kbit/s and 424 kbit/s, but higher rates are expected in the future. In order for two devices to communicate via NFC, one device must act as an NFC reader/writer and while the other must have an NFC tag. There are two basic modes of operation covered by the NFC protocol: active and passive. In active mode, both devices generate their own radio field to transmit data. In passive mode, only one device generates a radio field. Passive mode is crucial for devices like mobile phones and wireless PDAs because it enables a power-saving mode to be employed to preserve battery life.