What is NFC?
According to Wikipedia, NFC — no, not the NFL’s National Football Conference — “allows for simplified transactions, data exchange, and wireless connections between two devices in close proximity to each other, usually by no more than a few centimeters.”
Sounds similar to Bluetooth, doesn’t it? Well, it is similar. They actually complement each other quite nicely. Overall, NFC is lower-power and will likely be used for authenticating two devices quickly. NFC has a lower bit rate than Bluetooth (424 Kbits/s versus 2.1 Mbits/s), therefore it isn’t the best choice for a constant connection (e.g., Bluetooth headset, keyboard, mouse, etc.).
However, it can be used to simplify the Bluetooth-pairing process. For example, you have a mobile device that you want to connect to your laptop — let’s say to transfer some pictures. You tap your phone on the laptop, enter in a PIN, and you are paired. No messy Bluetooth pairing process. Just a simple tap-and-go. Now you can move your phone several feet away from the laptop because you are connected via Bluetooth, which provides extended range.
Now, that is just one example of how NFC can be used. Check out the below video by Google:
Google I/O Conference — Near-Field Communication
Why Should you Care?
NFC has been around for approximately 10 years. In the past, many skeptics claimed that it was a “solution looking for a problem.” Indeed, that was arguably the case at that time. However, with the growing trend of “internet of things” — appliances, cars, houses and TVs will likely be interconnected, coupled with the ubiquity of mobile devices — NFC is well suited to bridge technology of the physical and digital worlds. On the mobile payment/wallet side, NFC is well suited to be the key enabling technology behind it.
— Microsoft: ‘Microsoft Confirms NFC Support in Windows Phone’
Now, these plans center on having embedded NFC chips; the technology required to do NFC transactions is embedded in the device itself. The other alternative is using a third-party solution, such as Device Fidelity, which makes SIM/memory cards and cases that include the required NFC technology.
Each approach has its pros and cons. On the embedded side, it’s clearly the easiest path as everything you need should be included; we’ll discuss the Secure Element later. The downside is that carriers and handset makers control a large part of the value chain, potentially limiting features and functions (e.g., carriers in some regions may block out functionality for a variety of reasons). But, of course, for the general consumer, embedded will likely be the dominant approach.
When using a technology such as Device Fidelity, the main advantage here is control — regardless of what carrier you are using, device features, regions and so on. On the downside, it requires extra hardware (and software) to manage in order to gain NFC capabilities.
So what are the projections? Well, research firm ABI indicated that “by 2016, 552 million handsets will have NFC.” With the current growth of mobile devices, and rapid release cycles, it is likely that it will be difficult to buy a phone without NFC in the near future. In my personal opinion, it will be difficult to purchase a mobile device without NFC capabilities after mid-to-late 2012. And if Apple ever includes NFC, that very well could be the tipping point.
Either way, NFC is making its way into our lives. The applications are quite numerous. Just take a look at what is being tested in some cities, such as mobile payments, public transportation, medical record access, event ticketing and more.
In the next blog entry, I will cover the applications of NFC. So, stay tuned for NFC: It’s all about the Consumer first.