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NFC chip supplier Inside Secure has announced support for a new category of low-cost but nonstandard RFID tags that it said could be used in place of standard tags to send data to NFC phones.

The tags, called "RF barcodes" by their maker, Silicon Valley-based Kovio, could be attached as "smart labels" to product packages and to smart posters in stores to enable consumers to receive product details, promotional offers, coupons, loyalty points and nutritional information by tapping their NFC phones on the tags. In-store mobile promotions are among the most anticipated uses for NFC tags.

The Kovio tags are not actual bar codes, but printed integrated circuits that send data using the ISO/IEC 14443 standard frequency, 13.56 MHz, according to Kovio. It is targeting the market for bar codes on product packages and also low-cost transit fare and entertainment venue tickets. The tags are also used for inventory tracking. At volume production, the company said the tags could be produced at 5 U.S. cents or less apiece, which would be significantly lower than standard NFC tags.

"They can be manufactured with very short lead times–this is the key difference in the silicon ink versus silicon foundry techniques," Charles Walton, chief operating officer for France-based Inside Secure, formerly Inside Contactless, told NFC Times. "They’ve (Kovio) commercialized very quickly and at a very low cost, these devices. They are a very reliable, very elegant, cheap simple solution."

Both the Kovio tags and standard NFC tags could store small amounts of data, such as URLs or SMS codes that could open mobile Internet connections on NFC phones, enabling consumers, for example, to access product information or coupons.

Update: Kovio's vice president of business development, Vik Pavate, said consumer product companies will not put conventional RFID tags on millions of different types of products because the tags are too expensive–he contends they are stuck at a 10- to 15-cent price point apiece.

"The conventional silicon platform is not capable of getting to where we are now," Pavate told NFC Times. "In the context of brand promotion, it’s like a Ferrari–very expensive. No brand company will make an investment at the price of conventional silicon. They’ve (silicon manufacturers) been talking about getting down to 5 cents for years." 

Without affordability, there will be no widespread tagging of products in stores. And that would greatly reduce the marketing and advertising reach of product makers and merchants, as they try to interact with consumers on NFC phones, he said, adding that Kovio's goal is to reduce the price of its tags to a penny apiece in a few years. End update.

Nonstandard Technology
But while the Kovio tags support the standard contactless radio frequency, they are proprietary and do not comply with any of the four tag types standardized by the NFC Forum.

Walton acknowledged it would require what he termed "slight modifications" to Inside’s MicroRead and SecuRead NFC chips to read the Kovio tags.

For NFC phones using other NFC chip makers’ products to read the Kovio tags, those chip makers would also have to make modifications, after concluding agreements with Kovio.

Inside points out its NFC chips are able to read standard NFC tag types as well, but its promotion of nonstandard tags is unlikely to sit well with the NFC Forum, a standardization and trade association. While the forum’s four standard tag types are manufactured or licensed by private companies, Broadcom, NXP Semiconductors and Sony, their inclusion in the standard means that NFC Forum-certified phones should be able to read them without modification to the NFC phone chips. 

"Standards make life easier to create growth in the market much faster," Jeff Miles, director of mobile transactions for NXP, told NFC Times, when told of the Inside announcement.

Kovio is itself a member of the NFC Forum, and Inside hopes the company's tags one day will become part of the standard. That is possible, though it would create a fifth tag type.

Update: When asked by NFC Times whether it viewed a possible rollout of nonstandard Kovio tags a potential problem, and if it would consider standardizing the technology, NFC Forum Chairman Koichi Tagawa responded only that the forum is a "member-driven organization," and as such, "we have a process in place for members to propose new technologies for the forum’s consideration." End update.

The Kovio tags are on display this week at the International Computer Electronics Show in Las Vegas.

Kovio's Pavate said the company has raised $85 million in venture capital.

Tom Zind contributed to this article.