Nokia Oyj has recruited the makers of the "Angry Birds" mobile-phone game to give a boost to short-range technology that may become the wireless standard for consumers paying for merchandise with a swipe of the handset.
The mobile-phone maker is working on completing an upgrade of its Symbian software in coming months that will switch on the near-field communications capability on its C7 smartphone, said Sixten Sandstroem, a Nokia manager responsible for business partnerships in so-called NFC. The model, which went on sale with T-Mobile USA last month as the Astound, is Nokia's first widely sold handset that carries the NFC function.
Nokia, one of the pioneers of the technology, risks being caught up by rivals including Google Inc With applications such as exchanging business cards between handsets and retrieving information at museum exhibits and bus stops driving usage, as many as 70 million NFC devices may be sold this year, according to Richard Clemmer, chief executive officer of NXP Semiconductor NV, a maker of chips that power the technology.
"The C7 is just the beginning," Sandstroem said in Espoo, Finland. "We want to create an open ecosystem which means we will partner with trusted service managers, credit cards, everyone."
While Nokia will ship phones on Microsoft Corp's Windows 7 operating system in large volumes in 2012, the company has a target to sell another 150 million phones based on the Symbian operating system. The number of NFC-enabled devices sold may rise to 300 million in 2013, NXP's Clemmer predicts.
'Angry Birds magic'
NFC complements the earlier short-range wireless system Bluetooth by making it easier to exchange small amounts of information with a tap. Bluetooth connections with headsets, speakers and other devices, for example, can be started and stopped by tapping two NFC-equipped devices against each other, a simpler method than current ways of connecting.
Rovio Mobile Oy, maker of "Angry Birds," is taking the megahit game to its next level with an NFC-enabled version. " Angry Birds Magic" will give players 20 more screens in which they fire birds from a slingshot at structures built by their porcine enemies. Five playing scenes are available from the start. Users must then find other players with NFC-equipped phones and tap handsets with them to unlock further levels.
"We're going to use the power of our brand to maybe bring NFC to a wider user base so people realize what the technology is," said Matthew Wilson, a marketing manager at Espoo-based Rovio. "It's not going to be highly profitable at first but it's something we'd like to be involved in."
Paying by phone
Nokia has experimented with NFC projects as early as 2004 and introduced its first handset adapted for the technology that year. With the wireless industry taking time to agree on the technical standards, customers are designing networks that also work with contactless cards such as credit cards, transit passes and loyalty cards.
Part of the technology's promise lies in folding the contents of users' wallets into the mobile phone, and in making it possible to integrate coupons and other immediate offers into the payment process.
The need for cooperation from merchants, banks, regulators and trusted service managers to verify users' identity has slowed NFC's adoption as a payment channel. Nokia sold its shares in Venyon Oy, which provided TSM services, to Germany's Giesecke & Devrient GmbH in 2009.
"It's a chicken-and-egg problem," said Geoff Blaber, a London-based analyst at CCS Insight. "NFC is not a cheap component to integrate into a phone, so as much as manufacturers may want to, until there's something that generates demand pull, it'll be a nice-to-have on the feature tick-list rather than a strategic necessity."
NFC hardware may cost as much as $5 per handset, CCS Insight said in a February report, noting "a lack of urgency to add this feature in the absence of sustained operator demand."
Nokia withdrew a planned NFC handset last year, citing changes in its product lines. Last week, Nokia agreed to transfer its Symbian software operations to Accenture Plc, weeks after announcing Symbian Anna, the version of Symbian that will enable NFC, and two Symbian smartphones. Chief Executive Officer Stephen Elop, who met shareholders at the company's annual meeting in Helsinki today, is focusing on shifting Nokia's main Symbian smartphone platform to Microsoft Corp.'s Windows Phone 7.
Last week, Nokia agreed to transfer its Symbian software operations to Accenture Plc, weeks after announcing Symbian Anna, the version of Symbian that will enable NFC, and two Symbian smartphones. Chief Executive Officer Stephen Elop, who met shareholders at the company's annual meeting in Helsinki, is focusing on shifting Nokia's main Symbian smartphone platform to Microsoft Corp's Windows Phone 7.
Nokia has fallen 23 per cent since the company announced the Microsoft shift on Feb 11. Speaking to more than 3,300 shareholders at the company's annual meeting, Chairman Jorma Ollila said the board stands behind the new strategy.
Elop, 47, a former Microsoft executive, "has moved Nokia forward in many ways," Ollila told shareholders. He cited the CEO's "huge amount of energy and desire to succeed," as well as his software background and experience at other companies.
Paying the bills
Research in Motion Ltd (RIM), the BlackBerry maker, unveiled the BlackBerry Bold 9900 and 9930 smartphones that include built-in support for NFC. Google Inc supports NFC in its latest version of Android and shipped its first phone with the capability, the Nexus S, in December.
"We've done our homework, we're ready, once the networks roll out we produce the phones," said Gerhard Romen, director of financial services in Nokia's low-end mobile phones business, when asked about the company's readiness for NFC payment networks. "It's not about us delivering phones that nobody uses and we carry the cost. It is about the market taking those."
Nokia executives declined to comment on the company's plans for using NFC on Window Phone 7. Nokia won't include NFC in the X7 and E6 announced on April 12, spokesman Andrew Flowers said.
Nokia closed little changed at 6.29 euros Helsinki. It has fallen 31 per cent in the past year, cutting the company's market value to 23.5 billion euros ($35 billion).
Samsung Electronics Co expects to sell more than 10 million units of its Galaxy II S model Android phone, which includes NFC. Sony Ericsson Mobile Communications Ltd has also said it will offer NFC on an upcoming handset.
"Mobile payments, at the end of the day, will pay the bill for NFC," said Dan Hays, a Washington-based partner at management consultants PRTM. "Releasing NFC-enabled phones before the ecosystem is ready will only mean that companies like Nokia will generate additional manufacturing costs and not be able to generate a sufficient return for them."