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NFC Implementation in Handsets on the Right Track with SWP but Delays Still Expected

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The chicken and egg scenario that has bogged down the embryonic NFC market has taken steps forward in recent weeks. The mobile operators' preference for the Single Wire Protocol (SWP) form for NFC implementation received official endorsement from the GSM Association last month. This followed the final ratification of the standard and a signing of a memorandum of understanding with EMVCo. in September. Now some industry insiders are expecting large volume shipments of NFC handsets in the second half of 2009.

However, IMS Research still forecasts that it will take more time than this for handsets using the SWP variation of NFC to be available in any significant volume. The latest data released by IMS Research shows that SWP NFC-enabled handsets will start to ramp up in 2010 before gaining significant penetration and volumes in 2011 and beyond. Whether this will be the long-term solution is yet to be determined though. Whilst SWP will account for the vast majority of shipments in the next four years, several companies have developments for SIM-only NFC solutions, incorporating the RF, microcontroller and secure element in the SIM card. These remain a medium-term prospect but IMS Research predicts that they will grow quickly account for 25% of the market in 2013 as operators work to maximise their position in the value chain.

"The natural design cycle of handsets means that launching NFC on any meaningful scale will take up to nine months at best; but there will be a further period of time as new handsets and the supporting infrastructure filter into the market place", said John Devlin, Research Director at IMS. "Whilst this is manageable and can be planned for, what is more unpredictable is the time required to turn well intentioned partnerships into workable relationships."

"The support from all parties for NFC is high and the feedback from the trials has been overwhelmingly positive", added Devlin. "Often with a new service or technology there is a period of learning and education for operators and end users. However, with NFC services for payment, ticketing and the provision of information everyone is able see immediate benefits. Where it breaks down is in how the business partners can best agree to make money out of these services without stepping on each others' toes. It is natural that the operators will look at SIM-only solutions that will strengthen their ability to control the NFC services available to their customers", Devlin concluded.

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