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Mobile NFC for Creative New Marketing Applications

As the number of mobile phone-based payment users grows worldwide to over 375 million in 2015, the demand for devices enabled with near field communications (NFC) -- the underlying communications technology behind many mobile payment solutions -- will grow as well.

According to the latest market study by In-Stat, the adoption of this technology will push global annual shipments of NFC chips to over 1.2 billion by 2015.

NFC is a set of technologies that supports wireless communications between two devices in close proximity to each other. An NFC link is very quick to set up, enabling small amounts of data to be exchanged over short distances.

This capability is unique compared to other wireless technologies, and it makes NFC an ideal solution where quick exchange of small amounts of data is paramount to a quality user experience -- such as payments made using a mobile device.

“As the costs of NFC chips decline, and NFC radios are combined with other chip functions, the cost to integrate NFC into handsets will be outweighed by the benefits,” says Allen Nogee, Research Director at In-Stat.

The growth of combo chips will also allow NFC radios to piggyback on technology that already has significant penetration in the market. For example, Bluetooth radios, which currently have 100 percent market penetration, can be integrated with NFC radios, making the choice to include NFC easy for OEMs.

Today, the focus of the NFC market is shifting from payment applications that can be enabled by NFC, to creative new marketing applications.

With this new focus, In-Stat expects that some retailers will begin pilot programs -- in the latter part of 2011 and into 2012 -- that incorporate "smart posters" into their signage and outdoor advertising strategies.

In-Stat's latest market study findings include:
  • NFC will reach 30 percent global penetration by 2015.
  • Global annual shipments of NFC chips will grow at a CAGR of 129 percent over the forecast period.

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