Home Industry Market Explosive growth forecast for NFC-enabled handset shipments

Explosive growth forecast for NFC-enabled handset shipments

Global sales of handsets featuring Near Field Communication (NFC) increased ten-fold in 2011 to 30 million units, and growth is set to explode over the next five years to 700 million units on the back of compound annual growth of 87.8 percent.

In its latest forecast, wireless analyst firm, Berg Insight, says the explosion in NFC-enabled handsets will occur through to 2016. Berg also forecasts that the global rise in smartphone adoption is also driving higher attach rates for other wireless connectivity technologies in handsets including GPS, Bluetooth and WLAN, with these connectivity technologies already a standard feature on high-end smartphones and most medium- and low-end models.

According to Berg senior analyst, André Malm, declining costs will also enable broader integration in the feature phone segment that is rapidly gaining smartphone-like functionality.

Malm says that the attach rate for GPS among GSM/WCDMA/LTE handsets reached 31 percent in 2011 and grew to 38 percent for all air interface standards, while shipments of WLAN-enabled handsets have more or less doubled annually in the past four years and the attach rate increased to 33 percent in 2011. 'WLAN connectivity in handsets enables a range of use cases including offloading data traffic from increasingly congested mobile networks, media synchronisation and indoor navigation services.'  Malm observes that reliable indoor navigation systems for handsets need 'hybrid location technologies that fuse signal measurements from multiple satellite systems like GPS and GLONASS with cellular and WLAN network signals, together with data from sensors such as accelerometers, gyroscopes, compasses and altimeters.'

Malm also adds that periodic calibrations using satellite and wireless network signals are necessary to 'compensate for the low data accuracy and high drift obtained from low cost sensors used in handsets today.'

Berg reveals that NFC technology for short-range wireless point-to-point communication reached a 'breakthrough' in 2011 when several leading handset vendors released more than 40 NFC-enabled handsets. According to Malm, NFC can be used for countless applications such as paring devices to establish Bluetooth or WLAN connections, information exchange, electronic ticketing and secure contactless payments. 'Even though it will take some time before the stakeholders agree on business models for payment networks, other use cases such as reading tags and easy pairing of devices may well be compelling enough for handset vendors to integrate NFC in mid- and high-end devices already today.'


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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).