Near-Field Communications

Near-Field Communications

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Written By Eric Sandler

By Ed Sutherland

September 27, 2002

Another wireless technology? Sony and Philips don’t want Near Field Communications to be a Wi-Fi killer, however — they just want to sell.

Could a new technology from the creators of compact discs turn Bluetooth into the wireless equivalent of eight-track tapes? As so often happens, depends on who is talking.

Hoping to duplicate their success in the 1980s when Sony and Philips introduced audio compact disc recording technology, the two companies recently unveiled what they have dubbed Near Field Communications (NFC).

While Bluetooth and Wi-Fi have a range anywhere between 33 feet and 300 feet, NFC deals in inches — eight inches, to be precise. NFC “is designed for shorter distances and lighter content,” says Karsten Ottenberg, General Manager of Philips Semiconductors’ Identification unit.

All-Purpose Smartcards

The companies envision the technology will be used in smartcards to be added to everything from mobile phones to digital cameras to game consoles. An NFC chip would then make these devices ready for e-commerce, digital rights management or ordering online entertainment.

“I don’t think ‘near field’ really steps on Bluetooth or Wi-Fi,” says Allen Nogee, senior wireless component analyst for In-Stat/MDR. Nogee says he doesn’t see NFC “being used to download pictures from digital cameras, or as a WLAN. It’s just too slow.” At 212 kilobits per second, NFC’s data rate is nearer a 55k modem than the 1Mbps or 7Mbps speeds of either Bluetooth or Wi-Fi.

Both Sony and Philips have 802.11 and Bluetooth products, so they take pains to insist their NFC standard would compliment the more established wireless networks. Still, the companies believe there is room for a simple, less-expensive solution.

Cost Becomes Important

John Jackson, an analyst with the Yankee Group, believes with the ever-increasing complexity and cost of adding Wi-Fi and Bluetooth, price could become a major deciding factor for OEMs. NFC reportedly would cost 20 cents per chip. Bluetooth is expected to drop to $4 or $5 per radio.

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If the promise of affordable chips is realized, NFC technology “could become useful for e-commerce and security applications,” says Nogee.

Along with affordability, power drain has become of utmost importance to 802.11 and Bluetooth. By using a chip, rather than a battery, NFC hopes to make its mark. As a result, Philips sees NFC enabled devices connecting myriad un-powered items such as Radio Frequency Identification (RFID) tags and smartcards.

NFC could use smart card technology from both Philips and Sony. Visa International uses Philips’ Mifare smart card system for credit card and transit card applications. Sony’s Felica is used in transit systems in China, Singapore and Japan. Sony technology is also used as electronic money in Japan.

RFID is a postage stamp wireless device used to track vast inventories, monitor delivery routing and even notify shopkeepers when they need to restock items. Analysts see this machine-to-machine communication growing beyond the limited world of people gabbing on cell phones or Wi-Fi networks.

Yet, Ottenberg and others are quick to dismiss any notion of NFC being a giant killer. NFC “is designed for shorter distances and lighter content,” says the Philips spokesperson.

Unlocking E-Commerce

Able to inexpensively transfer data between laptops, game consoles, computer peripherals, PDAs and digital cameras, the new technology, proponents say NFC would provide yet another way to put new products and services in front of consumers.

Philips says by building smart card features into the NFC chip, a wide variety of consumer electronic devices could use such identification chips, not just intelligent credit cards of pass keys.

Nogee questions whether NFC chips can maintain their inexpensive price while containing the horsepower for e-commerce and other services. “These applications typically require a fair bit of processing power, and that can spell higher prices.”

Although Nogee believes there is always room for more wireless technology, Jackson says introducing a new standard alongside 802.11 and Bluetooth will be an up-hill battle.

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