Mobile contactless payments and other applications enabled by near-field communication (NFC) are coming to mobile handsets over the next year, but not in the format originally envisioned, according to ABI Research. A lack of commercially available NFC-embedded handsets combined with the rise of mobile handsets with microSD slots has helped shaped a new approach to NFC that promises to bypass the core involvement of both handset vendors and mobile network operators.

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During its latest NFC study, ABI Research split NFC IC forecasts into three key NFC markets: mobile handsets, computer and consumer electronics, and peripherals for mobile handsets. Combined, these markets will drive significant NFC uptake as NFC ICs approach 300 million shipments in 2015. Last year, more NFC ICs shipped for use in computers and peripherals than for handsets, and a new alternative platform is also emerging. New microSD offerings with NFC functionality are coming to market, joining stickers as a way to bring contactless connectivity to existing mobile handsets.

“Mobile handsets remain the key market for NFC, but increasingly the potential of the technology is driving NFC into other devices and form factors,” says principal machine-to-machine (M2M) analyst Jonathan Collins. “The potential to offer NFC to handsets with microSD slots is helping to change the mobile handset landscape for many NFC vendors and supporters.”

Mobile network operators remain the gatekeepers for mass NFC handset rollouts. But over the next five years, the emergence of microSD cards alongside other offerings such as active and passive contactless stickers will give mobile users initial access to mobile contactless payments. These options also provide a more direct route to potential customers for financial institutions looking to deliver contactless mobile phone payments.

Combined, these changes will provide renewed incentives for handset vendors and their major network operator customers to start delivering embedded NFC handsets. Consumer equipment (CE) device makers also can lead in the commercialization of NFC where it can provide simple connectivity between same-brand devices. ABI’s study, “Near Field Communications: Embedded and Aftermarket Contactless Applications for Mobile Devices and Other Consumer Products,” is available at www.abiresearch.com/research/1003525.

ABI Research