NFC is now available. The three NFC musketeers are hunting for the global market.

European chip maker NXP is a veteran in the NFC (near field communication technology) arena. In 2002, it co-invented NFC technology with Sony. NFC is a touch-based short-range wireless technology that allows consumers to make mobile payments, exchange information or access content services through a simple "touch" action.

　　This innovative technology can bring a new experience to the consumption process. For example, unlike swiping a bank card, swiping an NFC phone to consume can achieve more value-added services, such as merchant coupons and points redemption can be completed at the same time when swiping the phone to pay. This is because the electronic wallet on the phone associated with NFC can realize electronic ticket management. During the London Olympics last year, in a Samsung mobile phone advertisement, two mobile phones were touched, and an Olympic torch picture was passed from one phone to another, cleverly completing the torch relay. This utilized another function of NFC - point-to-point information transmission.

　　However, because NFC was overly labeled as "mobile payment" when it was born, more merchants valued its mobile payment function. Unfortunately, it is quite difficult to implement changes in the traditional financial industry, which has led to the ups and downs of the NFC industry in the past 10 years.

　　Despite this, NXP, the old swordsman, is very persistent and never gives up. In every period, no matter which big player in the mobile world, Nokia, Google or Samsung, promotes NFC, NXP is almost always behind it.

　　More importantly, this veteran has more than just NFC in his hand. In the traditional field, NXP is the earliest layout of the "touch and pay" application market such as contactless bank cards, bus cards, campus cards, and highway toll cards, which enables it to have more resources and experience in the process of migrating these traditional applications to mobile phones.

　　In the past two years, more powerful and well-connected players have entered the NFC arena, with Broadcom and Qualcomm in the United States being the most eye-catching. Broadcom is good at combining swordsmanship - in the semiconductor industry, it is one of the top three IP (intellectual property) owners in the world, is good at integrating various technologies, and is also the absolute leader in Wi-Fi, a wireless technology that is essential for mobile devices.

　　Another swordsman, Qualcomm, is the vane of the current mobile market. It is the world's largest chip supplier for smartphones. At the Consumer Electronics Show (CES) in Las Vegas that ended in January this year, Paul Jacobs, chairman of Qualcomm, replaced Microsoft CEO Steve Ballmer and became the first "unveiler" from the mobile communications field in the history of CES. Every move of Qualcomm, the "signature swordsman", will cause industry linkage. In November last year, Qualcomm Atheros, a wholly-owned subsidiary of Qualcomm specializing in the development of wireless and wired technologies, announced the launch of its first NFC chip.

　　The involvement of Broadcom and Qualcomm will make NFC a standard feature of mobile phones more smoothly. With the entry of heavyweights, is the NFC mobile payment market really going to be lively?

　　NFC is coming soon

　　NFC is about to be implemented. This is what Jiang Bo, senior business development manager of NXP's Greater China Intelligent Identification Division, who has been working in the NFC business for five or six years, is most focused on now.

　　Talking about the ups and downs of the NFC industry and the long R&D process, Jiang Bo said that his earliest colleagues working on NFC with China Mobile Research Institute were not married at the beginning, but now their children are in school. When asked what new applications NFC will have this year, he said, "We have discussed it for so many years, and most of the possible applications have been discussed by everyone." Talking about the NFC demonstration system that filled the venue of China Mobile's Global Developer Conference at the end of last year, he said frankly, "Now I don't feel anything when watching the DEMO (demonstration)." In the end, all the problems were focused on one point - now NFC should go out of the laboratory and let more people see and use it, and everyone should pay attention to how NFC is implemented.

　　In the past year of 2012, Jiang Bo saw an important signal - some companies began to invest in NFC. The most obvious example is that NXP sold more than 100 million NFC chips last year. Jiang Bo estimated that the total global shipments last year were between 150 million and 200 million. This means that among the 1.8 billion mobile phones sold worldwide last year, more than 100 million were "unknowingly" equipped with NFC, including many star models such as Samsung Galaxy S3, Galaxy Note 2, and OPPO's Finder 5. In this way, NFC mobile phone gears will drive application gears, and application gears in turn will drive more NFC mobile phones, forming a virtuous circle.

　　As for telecom operators, China Mobile released three products at its Global Mobile Developer Conference last December, the first of which was NFC. China Mobile systematically released some NFC specifications, announced its development application platform and deployment plan for 2013 - they will invest nearly 10 billion yuan in 2013 to promote the NFC industry chain and put tens of millions of NFC terminals on the market. Recently, China Unicom also launched the SWP-NFC project (a standard proposed by the European Telecommunications Standards Institute) that is consistent with China Mobile's standards.

　　Jiang Bo observed that in the past year, people have been trying new business models. One typical example is the cooperation between mobile phone company HTC and China Merchants Bank to develop the mobile wallet market. "In this cooperation, a bank and a mobile phone supplier directly established a cooperative relationship, without a direct relationship with operators or UnionPay." He said, "This industry has begun to become lively, many players are investing in it, and new models are constantly emerging."

　　Taking advantage of this trend, Jiang Bo is now considering how to launch more projects, and not just on the technical level. Currently, NXP has nearly 30 people focusing on NFC technology and market in Greater China.

　　Unlike the "old swordsman" NXP, Broadcom only entered the NFC field in 2009. Before getting involved in NFC technology, Broadcom was the Wi-Fi chip supplier for Apple's iPhone and iPad. Wi-Fi is a technology that can connect terminals such as PCs and handheld devices to each other wirelessly, and is now almost a standard feature of mobile devices. Broadcom has a dedicated team to focus on all wireless connection technologies on the market. NFC, as a short-range wireless communication technology, has also been a focus of Broadcom, the swordsman. In 2009, Broadcom predicted that the time for the NFC market to start was approaching based on the trends of operators and Google, so it began to develop NFC chips and launched the first generation of products at the end of 2011.

　　Kong Haiquan, senior business development manager of Broadcom Communications (Shanghai) Co., Ltd., believes that in 2013, the first batch of ordinary consumers, industry customers and specific customers in China's first-tier cities will be the first to experience NFC payment services.

　　In Kong Haiquan's view, the process of NFC implementation is similar to and different from the successful Wi-Fi technology. Looking back on the marketization path of Wi-Fi, Kong Haiquan said that it is "still vivid in my mind": the first generation of Wi-Fi products appeared in the 1990s, but it was not until the launch of Apple's disruptive product iPhone in 2007 that it really entered the mobile terminal, which also experienced a long wait of more than 10 years.

　　Kong Haiquan firmly believes that NFC will become more and more important in smartphones, just like Wi-Fi. "Because whether it is mobile payment, data interaction or device pairing, NFC can simplify the user's actions to 'one touch or one touch', which is the most magical and innovative part of this technology."

　　Of course, Kong Haiquan admitted that the links involved in the NFC ecosystem are more complicated than those of Wi-Fi. However, Zhou Yanyi, general manager of Broadcom Wireless Interconnect Combo Chip Business Unit in China, said that compared with two years ago, people's views on NFC have gradually become clearer, and it is easier to communicate and reach a relatively unified opinion on standards and specifications.

　　An NFC practitioner with many years of experience said that in the past two years, there were various mobile payment solutions on the market, including 2.4GHz, "pigtail" and film-covered ones, but now they are all unified into SWP-NFC. "Everyone is working together, so it's easy."

　　At the end of 2012, Broadcom launched a combination chip that integrates NFC, Wi-Fi, Bluetooth and other wireless technologies. An industry insider commented that in the future, as long as you make mobile phones, whether you want it or not, you will have NFC function if you add Wi-Fi, and it will not take up extra space on the phone. It can be said that the participation of Broadcom has made the popularization of NFC mobile phones smoother.

　　Zhou Yanyi also feels that since the second half of last year, the popularity of NFC has continued to rise, and every link in the ecological chain, including operators, terminals, applications, and testing companies, is "promoting NFC at full speed." In early December last year, Zhou Yanyi visited ISIS, a US operator mobile payment company. The company was jointly established in 2011 by the then top three US mobile operators Verizon, AT&T, and T-Mobile to develop mobile payment services. Zhou Yanyi got the information that NFC will be the standard configuration of the company's mid-to-high-end mobile phones in 2013, and the application focus will be mobile payment. This gave Zhou more confidence.

　　In their conversation, Broadcom, a veteran swordsman who entered the market at a new pace, was obviously more optimistic about the NFC market than NXP, a veteran swordsman who has experienced the ups and downs of the NFC market and is quite cautious in its market judgment.

　　Last year, Qualcomm, the "signature swordsman", also made frequent moves in NFC. It upgraded its membership in the "NFC Forum" to sponsor, and obtained a position as a director of the NFC Forum, becoming the 13th company to have a director position. At the same time, Qualcomm's wholly-owned subsidiary Qualcomm Atheros announced the launch of its first NFC chip. The NFC Forum is an NFC industry association organization established in 2004 that develops NFC standards and specifications, ensures the interoperability of devices and services, and promotes NFC technology globally.

　　David Favreau, vice president of product management at Qualcomm Atheros, said that NFC "will grow exponentially" in the next few years. He said there are three reasons: the mobile operators they work closely with all need NFC to enable mobile payments on smartphones; NFC can achieve Wi-Fi pairing of different terminals. When user devices are equipped with the new generation of Wi-Fi technology 802.11ac, video transmission between devices will become popular, and the role of NFC will be more obvious - it can simplify the search and connection steps of different devices. "At the same time, we believe that the main driving force for consumers to use NFC in the future is social and situational interaction."

David Favreau also stressed that 　　although mobile phones will be the most popular NFC devices in the next two years, NFC will be more widely used in the consumer electronics and computing


markets .

　　Reshaping of complex industrial chains

　　After experiencing the NFC promotion last year, Broadcom's Zhou Yanyi felt that NFC is a technology that can greatly demonstrate the "skills" of a company, because the industrial chain involved in NFC technology is too complex.

　　Broadcom chips were launched a year and a half ago, but they have to pass different certifications from the government, operators, credit card organizations, Google Wallet, etc., and also undergo compatibility tests with various hardware and applications, which is extremely resource-consuming and time-consuming. "That's why many manufacturers in the market have announced the launch of NFC, but only a few products can actually enter mass production," he said.

　　NXP's Jiang Bo also felt in last year's project that after Samsung, HTC, Sony, Blackberry, OPPO and other brands of mobile phones were equipped with NFC, the industry realized that the complexity of NFC-based mobile payment and other applications exceeded most people's imagination! The reason is that each application realized by NFC may require the reshaping of a process and an industrial chain.

　　Take NFC mobile payment as an example. Originally, bank card payment was divided into three roles: issuing cards, acquiring (who deployed the POS) and inter-bank transaction clearing. Now that payment has been migrated to mobile devices such as mobile phones, more roles are involved, such as mobile phone manufacturers and telecom operators, and the overall business process and system architecture have also changed. Take bank card issuance as an example. Previously, card issuance was done by applying for a plastic card at the bank counter. Now it may become "air issuance", where a virtual bank card is downloaded to the mobile phone through a remote network. This requires new technical means and business processes.

　　"How to define the distribution and service of an application, how to integrate it with existing business processes, this whole system is too complicated for most application providers, including professional institutions such as banks," said Jiang Bo. "You can imagine that from NFC chips to mobile phone manufacturers, and then to consumers through operators or open channels, how consumers obtain and use services, how to define the business model, how to distribute benefits, etc. are all difficult due to the many parties involved, and everything is still under exploration."

　　Given this difficulty, there are only a handful of companies that can truly build an NFC system architecture. Moreover, even if the platform is built, how to deploy applications is still a big problem.

　　According to an OPPO representative who launched the NFC phone, before making the NFC phone, they visited Japan and saw that NFC was quite common in small-amount payments and short-distance large data transmission. At the Barcelona Telecom Exhibition early last year, they also felt the high hopes placed on NFC by the industry. However, judging from the overall global promotion effect in 2012, it was not as fast as expected. "We are also exploring what will happen in 2013." He believes that the biggest problem at present is that NFC promotion requires terminal manufacturers to fully understand this technology and application, and have the ability to integrate and promote it. However, people still lack experience and have not made enough applications that change the user experience.

　　Application manufacturers are one of the keys to solving the problems faced by terminal manufacturers. However, in the past years of discussions on NFC, application manufacturers participated relatively late, which made their understanding of NFC and technical reserves very weak, and even had many misunderstandings. How to educate application manufacturers and how to provide them with a simple and easy-to-implement technical platform is the next challenge.

　　Jiang Bo understands the difficulties faced by mobile phone companies and application companies. Last year, he was often invited by mobile phone manufacturers as a consultant. Mobile phones have NFC, and application companies want to use NFC, but sometimes neither the mobile phone companies nor the application companies can explain how to use it and how to integrate it, so they have to ask NXP to be a technical consultant.

　　Because the industry chain is complex, Broadcom's Kong Haiquan does not think that 2013 will be the year for NFC to be popularized. Now, Kong Haiquan and his team are focusing on working with operators, UnionPay, and software and hardware companies to understand the needs and habits of end users, and to detail and standardize the needs, which is a prelude to the large-scale implementation of the product.

　　Qualcomm's NFC layout was later than the other two. Neeraj Bhatia, senior product manager of Qualcomm Atheros, said that one of their future cooperation focuses in China is operators. The next-generation NFC solution they are currently working on is not to integrate NFC into mobile phone chipsets as the outside world imagines, but they are working on the realization of new application environments, such as combining NFC with sensors on mobile phones.

　　In the future, Qualcomm plans to implement NFC technology in many new vertical markets, such as the automotive and medical markets. It is foreseeable that this will involve the service process and industrial chain reorganization of the medical and automotive markets.

　　Giants’ strategies emerge

　　In the application promotion, these swordsmen are very concerned about the movements of several international giants.

　　Jiang Bo said that 2013 will be the year when the giants' NFC strategic planning will surface. "These giants have a complete system for doing things. They are not in a hurry to set up a pilot in a certain place or make a press release. Instead, they focus on making early arrangements and forming alliances at some key points in the industrial chain in order to gain control points in the future industry." He said, "This is worth learning for our Chinese companies."

　　At the just concluded 2013 Barcelona Telecom Show, Samsung signed a global partnership agreement with the largest credit card organization VISA, which Samsung said was a step towards realizing a global mobile payment platform. The new generation of Samsung mobile terminals that support NFC and have built-in security modules will be pre-installed with the VISApayWave mobile payment application. Visa's mobile application management service creates a secure data storage area in the Samsung mobile device chip for the issuing bank. Using this service, the bank can download payment account information to the security chip of the Samsung mobile terminal through over-the-air download.

　　Prior to this, Google's Android operating system fully supported NFC technology from version 2.3.3; in the summer of 2011, Google and MasterCard and other partners launched Google Wallet. In the past year and a half, with Google's unparalleled operational strength, 200,000 merchants have supported MasterCard PayPass identification terminals, including leading stores and facilities such as Macy's, Subway, Walgreens, and New Jersey Transit in the United States; Google Wallet also supports credit or debit cards issued by the four major credit card organizations, MasterCard, VISA, American Express, and Discover. However, there are relatively few NFC phones that support Google, with only 6 models, because American operators have their own ISIS mobile payment company, which is currently in a competitive relationship with Google, and the operator channel has a huge control over mobile phones. In view of client, business and other issues, Osama Bedier, vice president of Google Wallet and Payment, said at the end of last year that it would take three to five years for NFC to be popularized.

　　Unlike Google and Samsung, Apple has not taken the lead in launching the rumored NFC mobile phone. Instead, it has taken another path - launching an application called Passbook in its operating system iOS6. Through scanning, all kinds of cards and coupons can be put into Passbook for management. When making purchases, Apple converts these electronic tickets into QR codes for use. Passbook is also combined with the positioning function to automatically display information such as membership cards and coupons of nearby merchants. Apple chose not to promote NFC before it had a business model in mind or NFC had not become a de facto standard.

　　Jiang Bo admitted that he is optimistic about domestic Internet companies such as Alipay. He believes that NFC will eventually be more about the integration of mobile smart terminals and the Internet, rather than traditional business.

　　"Alipay is good at approaching from the application scenario, considering the needs, application process and user experience of consumers in this scenario, and what kind of technical means can be used in each link to improve the user experience and bring value to merchants. Their focus is not on technology, but on service. Any technology including NFC is just a means." Jiang Bo said, "This is different from the perspective of some people who are too superstitious about NFC. It does not focus on NFC itself, but on how to use NFC to create value."

　　Relevant market research companies predict that NFC shipments will reach 300 million in 2013. With the new 300 million NFC phones coming to the market, NFC promotion will be more pragmatic. After more than 10 years of ups and downs, NFC may really enter the market for large-scale promotion.