Nokia Plans Smart Phones with NFC Chips

Nokia Corp. plans to include near-field communication chips in its smart phones, beginning next year.

Anssi Vanjoki, the Finnish handset maker's vice president for markets, made the announcement at a conference sponsored by the mobile payments trade association Mobey Forum.

The move would likely make Nokia the first handset maker to deliver NFC technology in a major rollout.

Red Gillen, a senior analyst in Celent's banking group, said Nokia's decision to include NFC chips "might put to rest the notion that banks would have to pay for the hardware."

Numerous financial companies have tested phones with NFC components for mobile payments, but few programs have gone any further, largely because the phones are not widely available and the banks, wireless carriers and handset makers have been unable to develop a solid business model.

The argument for many years has been which industry player would pay for the chips, Gillen said. "We still have a long way to go, but it appears the" handset manufacturers and carriers "are going to have to eat the cost."

He estimated that NFC chips cost $2 to $8 each.

To date, Nokia phones with NFC chips have been deployed only in pilot programs. Nokia's 6212 model last year was used in a Citigroup Inc. trial in India. The test involved roughly 5,000 consumers who could make contactless purchases at 400 merchants.

Nokia's announcement could be the missing link to plans by the mobile carrier Orange for a European NFC rollout next year.

The French carrier is working with Barclaycard to develop an NFC payments program, likely in France. It has also said it is collaborating with Gemalto NV, a Dutch provider of NFC chips.

Nokia is the only handset manufacturer with NFC phones, despite pleas from the GSM Association for other phone makers to do so.

Apple Inc. has shown some interest in NFC; it has filed several patent applications showing how it could use contactless payments with its iTunes e-commerce system. However, its newest phone model, announced this month, does not have NFC capabilities.

Apple "is still figuring out which direction to go with NFC" technology, Gillen said.

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