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Near Field Communication and all contactless technology

France-based fabless chip supplier Inside Contactless had an inside track to the NFC market a couple of years ago as the first supplier of NFC chips supporting early versions of the single-wire protocol.The protocol, or SWP, is a standard connection between NFC chips and SIM cards in phones. Many of the world’s largest mobile operators are insisting that any NFC phones they buy for their shops support the SWP to enable the SIMs they issue to store NFC payment and other secure applications. This would give the telcos influence over how revenue is shared for the applications.

Unfortunately for Inside, operators have yet to fully work out how to make that revenue with NFC, and so the telcos have been slow to place big orders for phones. That has allowed rival NFC chipmaker NXP Semiconductors to catch up on development of chips supporting the SWP, which SIM vendor Axalto, now part of smart card company Gemalto, originally created.

Inside makes most its money from its dominant share of the market for chips for contactless bank cards in the U.S. and has shipped about 150 million contactless chips over the past three and a half years. Deciding it can no longer wait for SWP-enabled phones to hit store shelves, Inside is now also promoting its chips in contactless stickers subscribers can attach to the back of their phones and tap to pay or conduct other transactions.

In April, it was revealed Inside planned to buy the smart card chip business from U.S.-based Atmel  Corp., giving it much greater reach in various markets, including contactless EMV cards, which require dual-interface chips. Atmel later said Inside would pay up to $58 million for the smart card chip unit, which had been shrinking in recent years.

The chip supplier is also trying to turn up the heat on rival NXP, joining an initiative announced in January 2010 with No. 1 smart card chip maker Infineon Technologies, along with two smart card vendors, to offer an alternative to NXP's dominant Mifare technology for contactless transit cards as part of an "open" licensing scheme. Available by next year, it would be Inside's first foray into the transit-ticketing market. In February, Inside said it would make its NFC middleware freely available for phone makers. The middleware works well with Inside MicroRead chips–although the vendor maintains the software also works with other NFC chips. 

In 2009, Inside also introduced its “Wave Me,” platform to promote the reader function of NFC phones to enable users to tap smart posters with their phones to open a connection to download such data as coupons, videos and tourist information. The vendor announced a partnership with Connecthings, a France-based tag-system provider in August 2009.

Despite its substantial business selling chips for U.S. contactless bank cards and introduction of chips for stickers and higher-end dual-interface chips for contactless EMV cards outside of the U.S., NFC remains vital to Inside's efforts to turn a profit. Among promising signs is the announcement in early 2009 of a deal and major funding from U.S.-based Qualcomm to incorporate Inside NFC chips in Qualcomm chipsets used for 3G phones. NFC Times also has learned Research in Motion is working with Inside NFC chips for possible inclusion in one or more of RIM's BlackBerry smartphone models.