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NFC and enhanced WLAN could oust Bluetooth and UWB from mobile handsets
Posted: 04-May-2005 [Source: Analysys]

[Analysy looks at short-range wireless technologies and views WLAN enhancements and NFC embedded in cell phones as offering the greatest service opportunities for mobile operators.]

Cambridge -- Enhanced IEEE 802.11 WLAN and Near Field Communication (NFC) are the two short-range wireless technologies that could offer the greatest service opportunities for mobile operators if embedded in cellular phones, according to a new report published by Analysys, the global advisers on telecoms, IT and media.

"With the emergence of a variety of new short-range wireless technologies, such as Bluetooth and WLAN enhancements, Ultra Wide Band (UWB) and NFC, the battle is on to get these extensively incorporated into mobile handsets," according to report co-author, Dr Alastair Brydon. "With over 650 million mobile handsets sold in 2004 alone, implementation in mobile devices could offer manufacturers attractive returns based on the prospect of significant economies of scale. However, given the overlaps in capability between some of these technologies, there will inevitably be competition. Not all of them will be successful."

Bluetooth is already widely deployed in mobile handsets and Bluetooth 2.0 will provide useful (albeit limited) data rate enhancement, to 3Mbit/s, while halving battery consumption. "Bluetooth and UWB will battle to become the preferred cable replacement technology, but they will do little to enhance mobile operators' service opportunities. This opens the door to WLAN," says Brydon. Furthermore, the standardisation of UWB has been significantly impeded by a split between to alternative proposals. "If the situation is not quickly resolved," adds Brydon, "the opportunities for UWB to achieve economies of scale will be seriously damaged, and IEEE 802.11 will be adopted in its place for most applications."

The report shows that new developments will propel IEEE 802.11 to achieve a lead over rival technologies in terms of economies of scale and scope. IEEE 802.11n and IEEE 802.11e will both extend the capabilities of WLAN technology and enable significant new applications. "By improving the data rate, range and voice support of IEEE 802.11, they offer the prospect of cordless voice services to rival DECT, as well as high-speed networking to surpass UWB," says report co-author Dr Mark Heath. "The challenge for mobile operators will be to control the development of WLAN services to ensure that they become complementary to cellular services, rather than competitive."

The report also highlights the potentially substantial impact of a new short-range technology called NFC, which enables electronic devices to automatically exchange information simply by bringing them close together. NFC has emerged from developments by Sony and Philips to improve the usability of consumer devices by allowing users to instigate applications by touching devices together in an intuitive way, similar to people shaking hands. It is now backed by the NFC Forum, including companies such as MasterCard, Microsoft, Motorola, Nokia, Samsung, Texas Instruments and VISA.

NFC could enable mobile phones to be used as electronic cash, a credit card, a key and an identity card. This opens up substantial new revenue opportunities for mobile operators, handset vendors and service providers. "Japan is already showing the potential of NFC, using Sony's FeliCa technology, which is a forerunner to NFC," says Alastair Brydon. Six months after its launch by NTT DoCoMo, over 1 million FeliCa handsets had been sold and 12 000 FeliCa terminals had been deployed throughout Japan. "Mobile operators are in a prime position to seize the many opportunities that NFC could enable."

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