Envisioning a World With NFC-enabled Phones

This means altering the focus from reducing costs in the supply chain to finding new ways of marketing and connecting with customers, with the end goal of driving up revenue and brand recognition. Why the change? Because the budget for NFC-enabled applications and campaigns will not come from supply chain organizations, but rather from marketing and advertising organizations. From the standpoint of RFID companies developing NFC technology, they will need to develop a new set of value propositions to appeal to a different side of the enterprise customers.

On the technology side, there is a different set of considerations. Security will take center stage across almost all applications—financial transactions, ticketing and access control, and even consumer product applications. NFC technology must ensure that only the correct customer gets access to the right product, service or promotional offering. By definition, NFC tags have a very short read range—typically, just a few centimeters. Consequently, businesses will also have to determine how to apply both NFC high-frequency (HF) RFID tags and long-range ultrahigh-frequency (UHF) tags for supply chain applications, as well as define priorities and/or processes for supply chains.

Taking a look at costs, the expense of RFID tags has previously been an impediment to widespread use. However, the prices of RFID ICs and tags have been dropping, and printed RFID chips will take costs down to unprecedented levels in the future. Alternative security technologies, like Physical Unclonable Functions (PUF), further lower the costs of security and authentication. PUF is a type of silicon "biometrics" technology that provides low-cost mechanisms for robust authentication of ICs, such as those used in NFC RFID tags. Verayo, one of the recent entrants in the RFID IC space, has introduced its Vera M4H, a low-cost secure and unclonable RFID chip based on PUF technology. Lower cost reduces the barrier for broader application of NFC RFID tags, to a broader set of lower-cost consumer products. While price becomes less of a concern, the upside will be new revenue generated with new applications.

NFC-enabled mobile phones have obvious advantages for both businesses and consumers, while the technologies are now mature. The issue blocking adoption, however, is the "chicken-and-egg" problem—that businesses are waiting for the phones to become available, while operators are waiting for the applications. But, along with worldwide trials of NFC, there are some out-of-the-box approaches that may very well be the catalysts in driving adoption. Perhaps the next time you walk into a wireless provider store, you just might see an NFC mobile phone.

Vivek Khandelwal is the VP of marketing and business development at Verayo, where he has been driving the company's business and product strategy around PUF-based security products, including Verayo's RFID chips.