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Innovision deals expected to lead to low-cost mass market NFC phones

Three new licensing deals should see NFC being built into mass market handsets for under $1 — but not until 2013, says Innovision CEO David Wollen.

NEW DEALS: Innovision has licensed its NFC know-how to NXP and two as yet unnamed mobile device chipset manufacturers

NEW DEALS: Innovision has licensed NFC know-how to NXP and two as yet unnamed mobile device chipset manufacturers

Innovision Research and Technology has signed licensing agreements with three companies that are expected to lead to the development of low cost, mass market NFC-enabled handsets.

Two of the licensees are manufacturers of mobile device chipsets who will be working with Innovision to incorporate the company’s NFC expertise into their product lines. The third is NXP which has signed a wider joint marketing and licensing agreement that will see the two companies pooling together their respective NFC expertise to provide a combined offering to potential customers looking to integrate NFC into handsets.

Innovision, a board member of the NFC Forum, specialises in developing RF and NFC semiconductor solutions which it then licenses to silicon suppliers for incorporation into their own products. The three new deals all involve the company’s System on Chip (SoC) connectivity solutions for NFC handsets, known as Gem IP.  By licensing Gem IP, chipset manufacturers looking to add NFC functionality to their products can work with Innovision to build NFC into their product line without having to begin the development work from scratch.

In the current generation of NFC handsets a separate chip is built into the phone to handle the NFC functionality. With Gem IP, however, NFC functionality could be added to one of the chipsets already built into mobile phones. This has two advantages — it makes the addition of NFC less expensive and it means NFC takes up less of the real estate within the handset.

Because there is an overlap between the needs of an NFC chip and those of the chipsets that handle Bluetooth, WiFi and other connectivity functions, these connectivity chipsets are the most likely future home for NFC, Innovision CEO David Wollen explained to NFCW. And that means that the key to unlocking a mass market of inexpensive NFC handsets now lies with connectivity chipset suppliers — such as Qualcomm, Broadcom, ST, Samsung and Texas Instruments — rather than the handset manufacturers themselves.

That said, Wollen explained, the connectivity chipset suppliers only add functionality to their products when they know there is demand from the handset manufacturers they supply. And the handset manufacturers only demand those features when they know there is demand from the operators they supply handsets to.

The fact that two unnamed chipset suppliers and NXP have now licensed Gem IP is therefore a strong signal that the demand from operators for NFC functionality is real — but, says Wollen, it doesn’t mean that low cost NFC handsets will be appearing soon. There are fundamental differences in the way in which each connectivity chipset supplier implements its solutions so it will be one to two years before the new licensees have products available for shipping. Then it also usually takes the handset suppliers two years to go from initial concept to manufacture, meaning that it will be 2012 or 2013 before low cost NFC handsets using Gem IP are in the hands of consumers.

At that point, though, the extra cost of manufacturing a handset with NFC functionality should be under a dollar, says Wollen, and it’s reasonable to expect that the majority of Bluetooth-enabled mobile devices (currently 50% of all phones) will include NFC.

In the meantime the new generation of NFC handsets expected to become available from a number of handset suppliers later this year will provide operators with a range of handset options, albeit at a higher cost (in the US$2 to $2.50 range) than the second wave of handsets expected in 2012/13.

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