Near Field Communication (NFC) technology makes possible safe and simple two-way interactions between electronic devices such as mobile and tablets. NFC includes a set of protocols that allow devices to communicate with each other when touched together or brought close at a distance of 3.9 inches or less. The technology works even when one of the devices is not powered by a battery. NFC makes use of the RFID technology and is a viable alternative to the prevalent short range data exchange options like Wi-Fi and Bluetooth.
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NFC offers various benefits over Bluetooth. It does not require a pairing code and takes lesser time to set-up. The shorter range provides better security, making it suitable for crowed areas. The low power feature offers added advantage. NFC is expected to make connections easier, transactions quicker and data sharing simpler in the coming years. It will eliminate the need to carry multiple credit cards as well as debit cards. For a long time NFC technology was riddled with problems between banks and network operators relating to sharing of revenues. However, a business model based on cooperation was agreed upon to serve the interests of all parties involved.
NFC market includes product categories like NFC Controller ICs, NFC tags, NFC readers and NFC secure elements. NFC secure elements can be further split into NFC micro SD cards, embedded secure elements, NFC subscriber identity module and NFC universal integrated circuit card. Several mobile and tablet makers are adding NFC features to their products. NFC-enabled mobile devices are anticipated to reach 863 million units in 2015. The prevalence of NFC-compatible infrastructure such as point of sale and transportation systems in various regions is conducive to widespread implementation of NFC technology all over the world in future.
Geographically, the Americas, US in particular, account for a significant share of NFC market, while the Asia-Pacific region is expected to witness the fastest growth in future. European countries, specifically Germany and UK, and the Middle East, Australia and Africa are also seen as promising markets. The presence of semiconductor and other NFC related businesses in countries like Canada, Mexico and Brazil provide an impetus to NFC growth in the Americas. There exist a large number of small operators in the NFC market and the gaps are being filled by several new entrants. Markets are characterized by collaborations and partnerships across the supply chain, primarily among the top competitors.
NFC technology is expected to play a major role in future with rising internet penetration, trend of mobile commerce and higher availability of NFC-enabled mobiles driving growth. Its applications will cover a gamut of activities like data sharing, authentication and access control, ticketing, and NFC based geo-tagging. NFC integration is taking place in several consumer electronic devices and the technology is drawing attention from industries like security, healthcare and automobile. NFC will generate revenues for the entire NFC ecosystem that includes handset manufacturers, trusted service management system businesses and commercial NFC service providers. The market for NFC is expected to grow at a CAGR of 8.83% and will reach $16.25 billion by 2022. Key global players include Texas Instruments, Samsung Electronics Corporation, MediaTek, Infineon Technologies, NXP Semiconductors, among others.
Information Source: Grand View Research