NFC phones: Nokia missed the train
and Sagem Wireless came on board

Paris, February 19, 2010.
The MCW in Barcelona has reshuffled for some time, the cards in the foggy NFC playing field. Nokia, the uncontested world’s leading handset marker, the first to announce prototypes and ‘advanced-prototype“ of NFC phones for many years, mostly influential in ETSI and NFC Forum working groups, and in all trials and pilots around the world, didn’t announce, as planned, the commercialization of its Classic 6216 SIM-centric NFC phone (Single Wire Protocol compliant) [2], equipped with the NXP PN544 chip. We understand Nokia has other fishes to fry. OK. See the announcement with Intel. But nothing is surprising. We published below an article issued in SCT in last December that could be seen as premonition of what happens today, and give some indications that NFC has become something of a poor relation for Nokia.

One lost, ten or more found… It was a ‘fantastic achievement‘, as Michael O’Hara, Chief Marketing Officer at the GSMA said, to bring a full payment trial to Mobile World Congress in Barcelona, thanks to a team of industrial players such Samsung Electronics Co. Ltd., Telefónica, and Visa, together with Giesecke & Devrient, Ingenico, ITN International and La Caixa Bank. The participating companies have provided more than 400 NFC handsets to guests for use at the Congress. The Samsung Star NFC handsets contain Telefónica SIM cards from O2 pre-loaded with €60 airtime credit as well as a La Caixa Visa Mobile Payment Application. Participants can use their NFC phones to pay for food and drink up to a value of €75 at over 30 merchant locations around the Congress. But it was (again) a trial…

The most NFC emblematic announcement during the Congress was this of Sagem Wireless, with its “CosyPhone“, a first true NFC phone (not an already existing model with a NFC add-on, quickly wired in the labs), especially designed for NFC apps, and senior segment, “ultra-simple to use with a large screen, and elegant” insists Jerome Nadel, VP Executive, Marketing and user experience at Sagem Wireless, who is conviced that the kind of devices is preparing the third wave of smartphones, “capable of connecting things of the physical world to the cloud and the internet“.

The “Cosyphone“ is emblematic since it is supplied with a set of smart posters or simple tags (Wave-Me technology from Inside Contactless). NFC tags and smart posters may contain relevant phone numbers or complex URLs to send SMS messages or send and retrieve information from web sites. “The Cosyphone is the embodiment of our vision of enhanced NFC services, going beyond traditional payment and transit fare transactions to actually making the phone easier to use by simplifying access to functions and services,” said Loic Hamon, vice président, Produsct and marketing, NFC Business Line at Inside Contactless, who underlines that the Sagem Wireless NFC phone also embeds the “Open NFC stack“ [3] announced previously by Inside Contactless to unlock the chipset [4] part of the NFC ecosystem.

[2] This much-awaited handset was announced in April 2009. It is the first NFC Nokia phone to comply both with GSMA recommendations since for the first time, it supports SIM as secure element (but for card emulation only), and with NFC Forum tag specification (supported for read and write). In addition, it enables to access to NFC features from 3rd party applications (JSR-257), soi t is open to the SIM features, open to MNOs, and open to developers. But now the shop is closed.

[3] Inside Contactless Open NFC commercial-grade NFC protocol stack (formerly MicroRead Software Foundation) is now available in a free and open source edition under the Apache License, Version 2.0. Offering a consistent API across all NFC hardware, faster time to market and greater flexibility for OEMs and ODMs, Inside’s Open NFC 3.4 is available now for WinCE 6.0 (compatible with Windows Mobile 7) and Linux 2.6 platforms. An Android’s implementation will premier with the planned release of Open NFC 3.5 at the end of March.

[4] Qualcomm and Inside have already developed two 3G handset reference designs—one each for UMTS and CDMA2000 networks—that combine Qualcomm’s Mobile Station Modem (MSM) chipsets with Inside’s MicroRead multi-standard NFC chip.


The article published in last December with the title:

Does Nokia Still believe in NFC?

"Since the market for NFC is now maturing, the time is right for us to focus our efforts even more on NFC-enabled mobile devices and solutions designed to support NFC,“ said Mark Selby, VP, Industry Collaborations at Nokia, when the company announced in early December that it was selling to G&D its 43% shareholding in Venyon, the JV founded exactly three years ago between the two firms (when G&D held 53%). With all the signs of an oxymoron, the justification is portrayed both as an effort to support NFC while at the same time stepping back from the sector, sowing a lot of doubt about Nokia’s commitment to NFC.

These questions are all the more compelling given that the announcement made last April by Jeremy Belostock, then head of NFC, but since named to manage New Technology Solutions (?!!), that Nokia 6216 would be the “last” NFC telephone from the world’s leading handset maker (38% of the world’s market) could be interpreted today as the utter abandonment, pure and simple, of NFC, while the phrasing, intended to play humorously, really was only meant to signal that henceforth Nokia intends to integrate NFC technology in all its phones by default, without needing to call attention to the “NFC” attribute. Somewhat like Bluetooth. We’re not buying it, but we are concerned that NFC has become a neglected child for Nokia.

After announcing at the same time a number of lay-offs in some of its R&D centers (Finland, Denmark and Japan), Nokia released its financials targets for 2010, all of which point towards the development of service business. “I see a great opportunity for Nokia to capture new growth in our industry, by creating what we expect to be the world’s biggest platform for services on the mobile,” affirmed Nokia CEO, Olli-Pekka Kallasvuo. Nokia founded a new “Solutions” unit last October with the objective of integrating the mobile device, associated services and content into a unique and compelling offering for the consumer. The group is aiming for 2 billion euros revenue or more by 2011 for services in that activity, which makes no case for services related to NFC, but clearly suggest that the core system is the Ovi platform, an app store constructed on the model of Apple’s iPhone.

Today we see that all those challenges are there, and that once again the battle is being fought on the ground between handset makers, major internet actors and MNOs. Hasn’t Orange also just launched its own App store, apparently SIM-based? Nokia meanwhile has shown that it believes more in P2P payment (the online gaming market and monetization of social networs in particular) than in proximity contactless contactless payment, by creating Nokia Money and by allying itself with Obopay to develop this business.

And yet, Venyon’s business should pursue its development with the increasing strength of NFC services roll-outs, both SIM-based and SE-based (or SD-based), expected for next year, in full keeping with G&D’s strategy, for whom secure mobility has become one of the key points. There are no changes in the Venyon organization thus far. Venyon will continue to operate as before, providing TSM services to customers and projects in the NFC ecosystem. The firm is headquartered in Helsinki, with offices in Munich and Singapore. Lauri Pesonen, who came from Nokia (he was previously at Setec, a company acquired by Gemplus, and now part of Gemalto) remains CEO of the company.