NXP CEO: China will be next major NFC payments market

Chip maker NXP will focus on the “significant” Chinese market for mobile wallets, the firm’s CEO has said, as the company revealed a 40% increase in sales for its emerging ID business in a fourth quarter earnings call.

NXPRick Clemmer said the company would be more focused on China than other regions of the world, adding that “the opportunity in China will be significant and will represent a very significant growth picture”.

NXP said the increase in sales for its ID business, which includes mobile transactions and authentication, in the fourth quarter of 2014 was up more than 200% on the same period in the prior year. The increase is due to “strategic mobile transaction design wins”, which include the 65V10 NFC chip used in the Apple iPhone 6 and 6 Plus.

“Where we really perform well is when there is a secure element involved for a true secure mobile payment,” Clemmer told investors during the company’s fourth quarter earnings call.

“Somebody that wants to use an NFC radio just for another communication vehicle without the security associated with the secure element is really not what we’re focused on,” he continued. “There’s a lot of people that talk about applications that they don’t believe require security, part of that is driven by the carriers in the US who have really refused to let anyone other than Apple implement a wallet with a secure element.

“Our focus will be in those areas where we believe there is an opportunity to bring our unique expertise from an ecosystem viewpoint, whether we can leverage the banking relationships we have to be able to drive the mobile transactions.

“We think that beyond what is taking place in North America today, the China opportunity will continue to be significant. When we deal with our customers, we’ll be more focused on that China segment than focus on other regions of the world where they are still in the early phases of really thinking about what to do with the mobile wallet itself.

“So you will see us continue to focus on that with our customers and be sure that we don’t try to focus on the broad basis on NFC because, again, where we bring a unique basis is with our solution know-how and the secure element that can make that much more unique.”

“Our product position in smartphones and tablets is pretty broad based at this point in time,” Clemmer added. “In the mobile wallet specifically, we continue to be excited about the market growth as leader, clearly with the market now seeing some momentum in North America and with the rollout that Apple has on Apple Pay.

“But, when we look at China, we see a lot of interest and a lot of excitement associated with that and, clearly, a lot of the volumes will be driven in China and whether it’s sourced from the US or a Korean smartphone company, we think that the opportunity in China will be significant and will represent a very significant growth picture.”

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