RIM Stays Mum on Plans for Embedded Chips in NFC Phones

Research in Motion is continuing to decline comment on its plans for embedded secure chips in its forthcoming BlackBerry NFC phones.

The handset maker in the past has said it would work with mobile operators as it begins to roll out NFC phones this year. But a new report contends that RIM is seeking to go around telcos to put applications on the embedded chips. Among the assertions are that RIM has talked directly to banks about putting payment applications on the secure chips and that it seeks to use the chips to bind users to its phones.

The Wall Street Journal article today cites unnamed mobile operators in North America with the charge. U.S. and Canadian carriers have declined comment, but Robin Dua, head of EnStream, a mobile-money joint venture of the three largest Canadian mobile carriers, Bell Canada, Rogers Communications and Telus, anticipates a battle between the Canada-based handset maker and telcos. EnStream has introduced a peer-to-peer mobile-money service, Zoompass, and has tested contactless stickers at the point of sale.

"The carriers have been saying in a gentle way to RIM, 'Guys, you won't be doing this,'" Dua was quoted as saying, "I think it's going to be a little bit of a fight, frankly."

Dua could not be reached for comment to confirm the quote. RIM also is declining comment on the article.

In comments this week at the Mobile Financial Services conference in London in response to a question from NFC Times, one RIM representative said the handset maker, "for obvious reasons," was "very restrictive" about revealing what it has planned for NFC.

"We’re investing a lot of time, people and energy talking to a whole host of partners across the ecosystem to figure out how the technology could be used," said Rory O’Neill, senior director for global enterprise segment marketing in Europe for RIM. "Again, we’re committed to NFC. Many of our future smartphones this year will include NFC. What were focusing on now is working out the software and services stack around that."

He added that development of services by RIM was still in an "embryonic stage."

As NFC Times has reported earlier, the battle over control of secure chips in NFC phones is moving to the embedded secure elements expected to be included in most NFC smartphones hitting the market this year.

Whereas before, the battle over the secure element was between banks and telcos, the new fight appears to be pitting mobile operators against device and platform suppliers. The latter have realized the secure chip could be a valuable piece of real estate in the forthcoming NFC phones. They could perhaps rent space to service providers or use the chips to secure revenue-producing apps they distribute through their app stores.

Google is building a mobile wallet and along with handset makers using Google’s Android operating system might try to control the embedded chips in the phones. That could create a wallet war with U.S. carriers in the Isis venture, which AT&T, Verizon and T-Mobile announced in November. Sprint, which earlier dropped out of the planned joint venture, has its own NFC mobile commerce plans, NFC Times has learned, although details are sketchy.

RIM, however, usually cooperates with mobile operators and is not in the strongest of positions to go up against mobile carriers–especially in the United States, where the main distribution channel for phones is through carriers. RIM has seen its market share slipping in recent years against Apple iPhone and more recently, smartphone makers using Google’s Android platform.

Mobile operators, especially in Europe, are planning to put secure NFC applications, such as payment, on the SIM cards they issue. And the telcos, such as France Telecom-Orange, have looked on with some concern as smartphone makers order NFC chips stacked with embedded secure elements.

Andrew Bocking, vice president for handheld software product management at RIM, tried to be reassuring to telcos at last month’s Mobile World Congress in Barcelona, saying that the handset maker was "committed to our partners, partners such as Orange."

"We envision that the SIM will be a key part of that (NFC services), and we’ll make sure that is part of our offer,” said Bocking, appearing at a session on NFC. “The key is enabling the ecosystem."

But in response to a question in Barcelona by NFC Times, Bocking declined to say what RIM has planned for the embedded secure chips.

"There are a lot of opportunities there, and we want to make sure we enable all the members of the ecosystem," he said.

RIM is said to have insisted that the NFC chips include embedded secure elements. Inside’s SecuRead NFC chip is stacked with such an embedded secure chip, which could store applications that RIM controls, NFC Times has reported. In most NFC smartphones expected to be shipped this year, including BlackBerrys, secure elements could be enabled on both SIM cards and embedded chips.

Some have suggested RIM has a less controversial focus for the embedded chips–planning to use them to securely store ID credentials as part of network and physical access applications the handset maker provides for its large base of corporate and other enterprise users.

Bocking, during his presentation last month in Barcelona mentioned a number of applications that RIM believes its NFC phones might be used for, including retail payment, transit ticketing, access control for corporate campuses, sharing contacts and pictures, and activating accessories. The company is building application-programming interfaces for the applications, he indicated. 

"There are hundreds if not thousands of scenarios that NFC could enable for those use cases," he said.

RIM co-CEO Jim Balsillie said last month that "many, if not most" of the company’s smartphones released throughout this year would include NFC.

RIM ranked as the fourth largest mobile phone maker worldwide in 2010 with shipments of 47.5 million units, according to U.S.-based Gartner research.

 

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