Smartphones and NFC Intelligence

Smartphones and NFC Intelligence

Samsung Electronics unveiled its new Galaxy S4 in New York last week to great fan fare and high expectations. One key feature of the new phone is its near-field communication (NFC) capabilities.

NFC-enabled smartphones allow the user to interact with products at a local and retail level. The user can now use his or her phone to get product level intelligence simply by tapping the phone on a product. The phone can redeem coupons by tapping a coupon tag at the front of a store and then enable the customer to purchase the item via secure payment systems.

While the Galaxy S4 is considered Samsung’s flagship and a serious competitor to Apple’s iPhone 5, there are now over 100 NFC-enabled models on the market, including smartphones by LG, HTC, Blackberry, Samsung and Nokia. It is estimated that 285 million NFC phones and tablets will be shipped in 2013. Surprising, the only leading phone currently without NFC is the iPhone.

While smartphones are in our hands and leading the push to NFC, the real technology innovation is happening at the other end of the signal. Printed electronics is enabling low cost NFC Barcodes to be placed on everything from retail goods, advertisements, coupons and tickets. The NFC tags have item level intelligence and unique identifiers that transmit signals via an antenna to the phone.

To date, most NFC-enabled tags are made using single crystal silicon chips in traditional CMOS semiconductor foundries. These are what are typically called RFID tags. While the performance is good, the cost of mainstream RFID tags runs about $0.20 per tag. That is simply too expensive for most retail products.

The breakthrough innovation comes by using silicon inks and various printing technologies such as inkjet, screen and gravure. Some people call this printed electronics. This innovative process allows for semiconductor chips to be printed on more affordable metal foils. One company in Pangaea’s portfolio called Kovio prints a high performance, low cost 128-bit NFC barcode that interacts perfectly with NFC smartphones.

The real advantage is that printed chips are optimized for item-level economics as they are made in less capital-intensive factories and attach to less expensive antenna. Another advantage is that the intelligence and unique identifiers can be put into the chip as it is printed so there is no need to load it with intelligence after manufacturing. Finally, the printed NFC barcodes use approximately 5% of the chemicals, .005% of the hazardous gases and 25% of the energy to make compared to traditional silicon RFIDs.

In summary, item level intelligence using printed NFC barcodes and NFC-enabled smartphones will change the way we interact with retail products and advertising. Now that most smartphones have NFC, including Samsung’s Galaxy S4, I expect the iPhone will have it as well before too long.

General Partner, Pangaea Ventures Ltd. Chris is the founder of Pangaea and has been working with cleantech and advanced material companies since 1997. Chris is a lawyer by training and served as a partner with Osler, Hoskin & Harcourt.View Chris Erickson's profile on LinkedIn

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