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Near Field Communications, the standard for the wireless transfer of data between devices mere inches apart using a point-to-point radio, appears to be making a comeback. Yesterday Nokia (s nok) said it would embed NFC chips in all of its phones and Broadcom (s brcm) said it would pay $47.5 million for Innovision, citing the company’s NFC chip expertise.
Although NFC has long been seen as the best way to offer secure mobile payments via a cell phone as well as a way to deliver product information much like a bar code does, it’s never managed to achieve widespread adoption (GigaOM Pro, sub req’d). The issue was getting the radios inside enough phones so that companies felt it was worth investing in NFC readers — in other words, a classic chicken-and-egg problem.
But with Nokia committing to the market (it was one of the first handset makers to try out the tech back in 2003) and Broadcom’s buy, there’s a significant opportunity to jump-start demand. Despite its downward slide, Nokia still sells millions of phones worldwide, and Broadcom’s expertise in cramming multiple radios on an integrated chip means its could offer a combo of radios (including NFC) on just one chip, which would make it less expensive to add NFC to a phone. The combo of more phones and NFC functionality for less may be enough to tip the market and ensure NFC becomes as common as Bluetooth.
But I’m not going to get too excited. After all, Nokia scrapped its last round of NFC phone plans as recently as February, and I’ve sat through the NFC hype cycle before. Broadcom may have spent money buying an NFC player, but $47.5 million isn’t so big that Broadcom can’t afford to write it down, if NFC doesn’t take off. Plus, China Mobile with its 500 million users is backing a rival technology called RF SIM, and that kind of market can be hard to ignore.