A total of 552 million handsets will ship with built-in NFC functionality in 2016, according to a new forecast from ABI Research. Of those phones, 227 million (41%) will feature multiple secure elements, creating a market for NFC valued at more than US$1bn.

Although mobile network operators favour single wire protocol SIM-based implementation for the secure element, the market will develop with both SWP and embedded solutions shipping on single devices, says ABI. “Continued development of ICs combining both controller and secure element will result in most handsets shipping with an embedded solution as standard practice,” concludes the firm.

Overall, ABI Research forecasts that 78% of all NFC handsets will ship with some form of embedded secure solution in 2016.

“The issues affecting the location of the secure element remain a hot topic and although progress has been made there remains uncertainty among ecosystem players,” says ABI research analyst Phil Sealy. “As the market matures and business models are realised and deployed, a variety of secure elements are being deployed into devices to meet different client demands. In the long run, this will allow service providers to enter the NFC market alongside MNOs, in turn making the offerings of NFC applications more competitive.”

As well as the well-publicised NFC handset market, less glamorous sectors such as consumer electronics devices, tags, bridging solutions, and other markets will account for additional IC shipments totaling 534 million units in 2016, according to the new “NFC ICs and Devices” report. “NFC will be an extremely prosperous market for IC vendors, generating estimated revenues totalling US$1.3bn in 2016 in the handset market alone.”

ABI’s John Devlin adds “The ongoing uncertainly over secure elements and ownership will drive IC vendors to develop a variety of competitive solutions, including integrating the NFC RF in a combo connectivity IC or the baseband, embedding the secure element and controller together, as well as standalone solutions. This will enable a number of business models to develop and be served, meeting the anticipated long-term market requirement to support more than one secure element in a device.”

Last month, Broadcom became the first chip vendor to announce an NFC controller capable of supporting multiple, active secure elements. The new chip will make it possible for the first time for consumers to use both a mobile wallet supplied by a mobile network operator and a mobile wallet supplied by a bank, handset maker or operating system supplier.

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