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NFC Is Appealing But Lacks Infrastructure

A usability test performed by Philips showed that U.S. residents might embrace NFC, but an ABI Research report says the technology needs a stronger, more uniform infrastructure.
By Mary Catherine O'Connor
Apr 06, 2006A 2005 study commissioned by Philips Semiconductors and Visa showed that consumers like the convenience, ease of use and "coolness" of making transactions with mobile phones that enabled a high-frequency RFID technology called Near Field Communication (NFC). A report by ABI Research, however, indicates more NFC-enabled phones and other infrastructure are needed before adoption will take off.

The study, designed to improve Philips' and Visa's understanding of the needs and interest of potential NFC users, took place late last year in a Philips lab facility in Atlanta. It involved three scenarios: purchasing a cup of coffee and Wi-Fi access at an NFC kiosk in a virtual coffee shop; downloading the URL for a movie trailer from a DVD retail display in a virtual store, then watching the trailer and purchasing the movie through an NFC-enabled set-top box in a home environment; and purchasing a ticket to an event through an NFC-enabled promotional poster. The study involved 20 participants, ranging in age from 18 to 40 years old, half of whom were women. All of the subjects were high school graduates who frequently use cell phones and also use credit and debit cards.

"Consumers were surprised to see how easy mobile payments were, and how fast the transactions took place," says Francesco Prato, business development manager of NFC for Philips Semiconductors.

Prato says the study provided Philips with insight into the importance of providing clear signage and instructions to the consumer making an NFC transaction, so that they know where to place the phone and whether the transaction was successful. It also showed that participants prefer to have phones set to initiate some transactions automatically, so they don't need to press any keys on the phone prior to conducting the transaction.

Though the usability test demonstrated that NFC technology could be well received by Americans, a study released this week by ABI identifies critical prerequisites to the successful worldwide deployment of Near Field Communication technology. The study points not only to unmet hardware and software requirements, but also to the need for increased interest and initiatives from mobile operators, as well as the completion and success of contactless payment trials. In Asia, mobile phones are widely used to perform payments and other transactions, but these devices use Sony's FeliCa air-interface protocol rather than NFC.

Erik Michielsen, ABI's director of RFID and M2M research, says ABI is surprised by the slow introduction of NFC-enabled handsets into the marketplace. Handset manufacturers Motorola, Samsung and Nokia have created prototypical NFC-enabled phones for use in NFC trials, but to date, only Nokia has introduced a commercially available NFC-enabled phone—the Nokia 3220. To process the NFC transactions, the Nokia 3220 uses Philips' Smart MX NFC chip, embedded in a phone shell that can be swapped out for the factory-issued 3220 shell. This handset is being used for an NFC trial in Atlanta (see Sports Fans Use NFC to Pay and Play).

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