Philips sees phone and NFC wireless love affair

A smarter form of radio frequency ID chips called Near Field Communications (NFC) will take off but that will be as much because of the mobile phone industry as because of their use in consumer electronics.

Mario Rivas, executive VP at the communications arm of Philips Semiconductors, which along with Sony brought the very short-range standard to the world, said there are "600 million reasons" why NFC will be a success, referring to the number of mobile phones that are sold every year.

Philips and Sony clearly have an eye on NFC as a technology that can, for example, set up links between electronic devices in the home - say a TV set and camcorder. But recent deals have seen Nokia back the standard, Samsung license it and Motorola team up with Mastercard for e-wallets based on the standard.

"It's clearly gaining momentum," Rivas said. "If you look at USB, it's now everywhere but that took 10 years and we don't want to wait 10 years. Mobile handsets seed NFC. It's an industry that innovates faster than others."

The dream is that NFC will more easily allow mobile phones and smart cards to be used as contactless payment devices. Philips chips, for example, sit in the Oyster card that is now commonly used on the London Tube network for payment at barriers and the theory is that not long from now users will be able to place their mobile handsets next to the same readers.

One of the main differences between NFC and RFID is that the latter is a read and write technology rather than one that just transmits.

It is also standardised. NFC is being driven by Philips and Sony but there is an NFC Forum. Rivas believes the number of companies involved needs to be balanced - "not too large but not too small".

However, Philips does face challenges, even from its position at the heart of this new wireless opportunity. For one thing, while it provides silicon for mobile phones that use GSM, GPRS and EDGE for data, it doesn't yet have a 3G offering - and many buyers of advanced handsets a few years from now will expect integrated NFC along with all the other bells and whistles.

Philips acknowledges that but for now it is mainly characterising NFC as a secure ecommerce enabler. It won't be marketed under its technology name, unlike Bluetooth and even - remarkably - GPRS but likely to be sold to end users in terms of what it does - whether a travel card technology, VCR programmer, e-wallet or something else.