Google’s hard-to-get Nexus 4 represents a big win for Broadcom; it’s the first Google device to use the California chipmaker’s NFC controller. That’s the chip that controls near field communication, the short-range wireless technology that allows two mobile devices to communicate without use of a cellular or Wi-Fi network. NFC enables applications like mobile payments and real-time content sharing, and Broadcom (BRCM) is sold on its potential that the company is giving its NFC software to competitors in an effort to create an industry standard.
Broadcom is contributing its NFC software stack to the Android Open Source Project and to Android 4.2, making the software available to device makers even when they do not use the company’s chips. It’s a risk worth taking for Broadcom; the company says driving an NFC standard is a top priority, and that there is plenty of business to go around.
“More than a million phones a week are being activated with NFC, and that number is growing,” says Mohamed Awad, associate line director for NFC at Broadcom and treasurer of the NFC Forum. ABI Research predicts that shipments of NFC-enabled smartphones will increase almost 500% over the next three years. Although the number of smartphone apps that truly leverage NFC is still limited, Awad thinks that as consumers who have NFC phones become comfortable with the technology, they are starting to look for it in other devices. “Gaming, headsets, mice, keyboards, Bluetooth routers, tv sets … we’re engaged with OEMs across all those segments,” he said.
The Broadcom solutions are compatible with different secure elements, the chips which encrypt data for mobile payments. “We are secure element agnostic,” said Awad. “We use open interfaces for both our secure elements and our hosts – [an OEM] could support two SIM cards.”
Using two SIM cards is less common in the United States than in some countries, but Samsung, Nokia, HTC and Sony all make dual-SIM slot smartphones for the U.S. market. Using dual SIM cards simultaneously allows a user to maintain two rate plans with one device, and the same strategy could be used to maintain two mobile wallets. Since different banks and retailers are working with different mobile payment providers, early adopters of this technology may find that they need more than one mobile wallet if they want to ditch their leather one.
While mobile wallets are expected to become a convenience for many Americans, they are already a necessity for many consumers in emerging markets. For people without bank accounts, the mobile wallet can enable transactions that were not possible without it. Berg Insights estimates that more than 700 million people in emerging markets will be using mobile payments by 2015. In many of these countries, dual-SIM card phones are extremely popular since they allow multiple family members or business associates to share one phone. So Broadcom’s dual-SIM compatible solution is poised to address a growing international market.
When the chips are down
Of course widespread adoption of Broadcom’s open source software stack only benefits the company if it leads to more sales of its silicon. By making the software available to all, the company will almost certainly lose some business in the near term as OEMs and developers adapt it for competitors’ chipsets. But in the longer term, Broadcom believes its software contribution will encourage wider and faster adoption of NFC applications, and that this will ultimately drive more sales of its chips. “NFC represents a huge, industry-wide opportunity and Android is the ideal environment for evolving this technology and its applications,” said Broadcom SVP Michael Hurlston. “Broadcom is committed to unleashing the massive potential for NFC not only in the mobile payments sector, but much more broadly in gaming, home applications and simplified device-to-device connections that will allow us to recognize the full value of NFC.”
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