April/May 2007

As widely reported in the mainstream press, thanks to a technology called Near Field Communication, mobile phones could gradually come to be treated as 'electronic purses' or payment devices, and given other similar functions currently fulfilled by smartcards.

By 2012 around 292 million handsets a year - more than 20 per cent of the total - will be supplied with NFC capability built in, according to ABI Research.

The handset makers are already working to exploit this market. Vodafone, for instance, is working with German technology company Giesecke & Devrient (G&D), and the two companies have now launched a document detailing how it would work.

However, ABI Research warns that hosting multiple applications means that NFC faces 'a host of complexities and interoperability issues', and it says NFC will not become widely available in the handset market until wireless operators are confident they will see a clear return.