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The beginner's guide to near field communications

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Near-field communications (NFC) will take off very quickly - once it's clear who can make money from it.

From the look of it, 2011 is the year that it will all become clear.

Mobile handset vendors are rushing to incorporate NFC into their roadmaps, with several high profile NFC-enabled handset launches pencilled for mid-2011.

RIM recently hinted at incorporating the technology into new BlackBerry devices, the iPhone 5 is widely expected to include an NFC chip, and Samsung and Nokia are understood to be planning several NFC-enabled phones.

Mobile operators are gearing up too. In the UK, for instance, O2 is building out an NFC team and forecasts that near field communications will enter the consumer mainstream in mid-2011. Orange UK is equally bullish, forecasting sales of 500,000 NFC-enabled phones this year.

So what's the fuss all about?

N-Marks the spot

NFC uses low-powered radios to communicate tiny amounts of information over very short distances - 100mm or less.

An NFC device, typically a mobile phone, can talk to compatible smart cards and readers, and other NFC devices, and it incorporates technologies used by public transport systems for ticketing and payments.

In Europe and the US, the term “NFC” is used synonymously with the "N-Mark" standard maintained by the NFC Forum.

N-Mark has expanded steadily, and its inclusion of standards used in mass-transit systems allow the NFC Forum to claim hundreds of millions of units deployed, despite the fact that only half a dozen NFC-capable devices have been launched, and none has yet been successful.

Applications for NFC include making a fast payment, or pairing a device with a router, or even exchanging business cards with a colleague.

Two applications that do offer an obvious revenue stream are stored-value payments and location advertising.

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