Mobile contactless solutions based on near field communication (NFC) technology are still in their infancy, but this constitutes a promising area of development for numerous new services based on proximity interactions between the end user and their physical environment. For promises to turn into reality, NFC requires a complex business and technology framework to be set up, among which the availability of NFC-enabled phones is one of the most critical elements. In a few countries in Europe and Asia-Pacific, NFC has begun to move into the commercial development phase, but these early launches are doomed to remain small scale until a wider choice of compliant phones becomes available.

Operator demand for NFC phones is the main driver for the development of NFC-enabled phones on a wider scale. This is still pretty much the trial stage for most operators around the world, but this is about to change as an increasing number of commercial launches are due to take place in 2008. However, this demand for NFC-enabled handsets is still quite fragmented, with different technical architectures used and different applications being rolled out. In addition, the NFC standardisation needs to be finalised, with a first complete set of standards released probably by the end of 1Q08. Overall, the availability of NFC-compliant phones in volumes will only start from the second half of 2008.

While in the short term there still remain important challenges for the development of NFC-enabled devices, we envisage that in the long term NFC will be a feature supported on the large majority of the phones sold, in all price bands. NTT DoCoMo has already reached this stage today with the FeliCa contactless technology, which is now embedded in about 80% of the phones sold by NTT DoCoMo in Japan. There are no great technological or cost barriers for NFC to be integrated quickly into a wide range of devices – unlike cameras or Bluetooth, which were first restricted to high-end devices.