Apple, China Mobile snubbing NFC

Caroline Gabriel/Wireless Watch
18 Sep 2012

Supporters like Nokia have so far deployed NFC mainly for non-payments functions like contact exchange or rapid log-in to home net-works, while real commerce giants like eBay/PayPal remain cautious and more focused on options which do not require specialized infrastructure, such as SMS or the web.

And while many operators (along with Google) favor NFC for commerce, because it is integrated with the SIM cards which they control, the massive China Mobile is proving an exception. The world's largest cellco is set to start trials of its own mobile wallet, and characteristically is taking what it calls a “China-style” approach, using RFID instead of NFC as the ultra-short range wireless connection to enable swipe payments with a handset.

The carrier says a combination of embedded RFID and the SIM card for proximity payments will be cheaper than NFC and easier for both cellcos and users to adopt. “There is no need for consumers to buy a new NFC phone, they can just replace their SIM card,” said Mina Hao, executive chairman of Quanray Electronics, and RFID-focused start-up which has been a key partner for Mobile during the latter's three-year development of its m-payments platform.

According to EETimes, this has been a complex process, involving several other innovators such as Watchdata and NationZ. All three partners have been working to address a key problem, overcoming signal attenuation problems caused by the battery being so close to the SIM card. Quanray has won this race, allowing Mobile to bring its solution close to market readiness (handsets and services are expected in the first half of next year), says the carrier. Trials are starting next month on a university campus in Sichuan province.

Its start-up supplier offers a patented hardware bridge that can “penetrate the battery” to connect SIM cards and RFID readers, while using standard SIMs (alternative approaches used higher frequencies for the SIM, which meant there was no interoperability with installed RFID readers). The bridge can be placed on the battery cover or on the side of the reader, like a sticker, and the user just needs to upgrade the SIM.

Mobile believes RFID/SIM will offer better performance than NFC because of the larger antenna and broader RFID applications base. Quanray is working on a second round of funding and hopes its relationship with the Chinese cellco will allow it to gain profile with other carriers and start to challenge RFID chip majors like NXP and Alien.

On Apple's side, Apple VP Phil Schiller said the Passbook technology in the iPhone 5, which consolidates a user's various cards and tickets, is currently enough to satisfy consumer needs. “Passbook does the kinds of things customers need today,” he told AllThingsD.

Until NFC is proven to be the main platform for mobile payments, adding it to a phone increases weight and cost for no good reason. Apple will be a catalyst for the developer and consumer bases if it does decide to add NFC to Passbook in future, and the non-appearance this time around, even for non-payment purposes, will be another setback for the technology.

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