The Nokia Oyj N9 smartphone is displayed in Beijing. Provided to China Daily

Phone makers plan to launch slew of handsets to ride the NFC wave

Mobile phone makers are getting ready to ride the next growth wave on the near field communication (NFC) technology that enables simplified transactions, data exchange, and wireless connections between two handsets in close proximity to each other.

Though the technology has been around since 2002, it is only now that it is being incorporated in handsets for mobile payments and other applications

Apart from the gaming possibilities, the NFC technology will also make it easier for users to share their favorite photos and music easily with friends and family.

NFC devices will also offer simpler solutions to purchase rail, air, movie or concert tickets online and also for easier check-ins.

But the technology will find the maximum use in the growing mobile payment market, say experts. An NFC device can help in completing payments made by credit cards by connecting to a payment gateway when a password is entered.

One company that is betting big on the NFC technology is the Finnish phone maker Nokia Corp. The company is planning to boost its customer numbers with its range of NFC-enabled phones.

Nokia launched the world's first NFC-enabled phone - Nokia 3220 in 2005, and recently said it would add NFC support to all future phones developed using the Symbian platform. There are also indications that the company will add the NFC function to its much-awaited Windows phones later this year.

Nokia has been actively promoting the NFC technology in the Chinese market and conducted trials for the technology during 2007 in Beijing, Guangzhou and Xiamen. The company, which has around 200 million mobile phone users in China, allowed users to use NFC-enabled phones in trials to take a bus or buy things in supermarkets and convenience stores.

"By pioneering the NFC technology Nokia has demonstrated its willingness to change," says Wang Ying, an analyst at the Beijing-based research firm Analysys International.

Chinese Internet giant Tencent Holdings Ltd recently developed a service that enables mobile phone users to share contact information with one another through NFC-enabled phones.

Jiepang.com, a Chinese location-based social website, has teamed up with Nokia to promote NFC check-ins. The service not only provides a faster and easier way to check-in but also to share locations with friends, by just swiping an NFC-enabled smartphone over Jiepang stickers.

Jiepang aims to extend the NFC-embedded stickers to other merchant partners in China soon.

"NFC check-ins has a lot of user benefits. We think our merchant partners will feel really comfortable rewarding check-ins, as they will know for sure that Jiepang users are physically present in their stores," says David Liu, chief executive officer, Jiepang.

Other mobile handset makers like Samsung Electronics Co, HTC Corp and Research in Motion Ltd, are also planning to launch NFC services.

Taiwan-based HTC Corp, along with China UnionPay, China's sole bankcard processor, is planning to launch a mobile phone that will support UnionPay's mobile payment standard. The handset utilizes NFC technology, and can help users to complete payments through banks' point-of-sale (POS) machines.

HTC's NFC product is expected to hit the market later this month, according to company officials.

Xu Jinyao, general manager of China UnionPay's mobile payment department, says there are around 400,000 POS machines in China with the number expected to reach 700,000 by the end of this year.

NFC mobile contactless payment transactions are expected to reach $50 billion worldwide by 2014, according to market forecaster Juniper Research.

The company also forecasts over 300 million NFC capable smartphones in the market by 2014, with at least one in five smartphones worldwide having NFC capability.

Western Europe, North America and other developed regions will continue to be major markets for NFC-enabled devices .

Sandy Shen, a Gartner analyst based in Shanghai, says the NFC technology will not see a rapid expansion in China until 2015.

"A wide range of application of NFC technology needs certain conditions. It requires a large amount of NFC-enabled smartphones in the market. In addition, it also calls for a clear business model," Shen says.