{"id":24260,"date":"2011-10-04T10:30:58","date_gmt":"2011-10-04T14:30:58","guid":{"rendered":"http:\/\/countingpips.com\/fx\/2011\/10\/04\/nfc-technology-what-investors-need-to-know\/"},"modified":"2011-10-04T10:30:58","modified_gmt":"2011-10-04T14:30:58","slug":"nfc-technology-what-investors-need-to-know","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/10\/04\/nfc-technology-what-investors-need-to-know\/","title":{"rendered":"NFC Technology: What Investors Need to Know"},"content":{"rendered":"<p><a href=\"http:\/\/www.investmentu.com\/2011\/September\/nfc-technology-picking-up-steam.html\">NFC Technology: What Investors Need to Know<\/a><\/p>\n<p>by <a title=\"Justin Dove Archives\" href=\"http:\/\/www.investmentu.com\/investment-experts\/justin-dove-archive.html\" target=\"_blank\">Justin Dove<\/a>, <em>Investment U<\/em> Research<br \/>\nTuesday, October 4, 2011<\/p>\n<p>Two recent events have likely ushered the dawn of NFC smartphone technology in the mainstream marketplace.<\/p>\n<ul>\n<li><strong>Google<\/strong> (Nasdaq: <a title=\"Google (Nasdaq: GOOG)\" href=\"http:\/\/www.google.com\/finance?q=NASDAQ%3AGOOG\" target=\"_blank\">GOOG<\/a>) finally released <a href=\"http:\/\/www.investmentu.com\/2011\/June\/nxp-semiconductor-google-wallet.html\" target=\"_blank\">Google Wallet<\/a> on September 19,<\/li>\n<\/ul>\n<ul>\n<li>Isis announced last week that a handful of major handset manufacturers are already showing support for its NFC platform. (Isis is a joint mobile payment venture between <strong>AT&amp;T<\/strong> (NYSE: <a title=\"AT&amp;T (NYSE: T)\" href=\"http:\/\/www.google.com\/finance?q=NYSE%3AT\" target=\"_blank\">T<\/a>), <strong>Verizon <\/strong>(NYSE: <a title=\"Verizon (NYSE: VZ)\" href=\"http:\/\/www.google.com\/finance?q=NYSE%3AVZ\" target=\"_blank\">VZ<\/a>) and T-Mobile.)<\/li>\n<\/ul>\n<p>While Isis most likely won&#8217;t come online until 2012, it should offer some competition to Google, which is likely to use its recent acquisition of Motorola Mobility to help further push its NFC agenda.<\/p>\n<p>While these companies duke it out over who controls the NFC payment market, the semiconductor companies producing the chips used in the devices will most likely be the ultimate winners.<\/p>\n<p><strong>NXP&#8217;s Weakness<\/strong><\/p>\n<p>For more than a year, <strong>NXP Semiconductors<\/strong> (Nasdaq: <a title=\"NXP Semiconductors (Nasdaq: NXPI)\" href=\"http:\/\/www.google.com\/finance?q=NASDAQ%3ANXPI\" target=\"_blank\">NXPI<\/a>) was touted as the best way to play <a title=\"NFC Payment Technology\" href=\"http:\/\/www.investmentu.com\/2011\/June\/nxp-semiconductor-google-wallet.html\" target=\"_blank\">NFC-payment technology<\/a>. Being chosen for Google Wallet was a large reason for that.<\/p>\n<p>NXP is possibly still a decent investment at this stage, especially since its stock is battered and is currently at less than half its 52-week high of $35.32. But looking at the future of NFC, NXP has an inherent weakness&#8230;<\/p>\n<p>It doesn&#8217;t manufacture baseband processors for smartphones. Although current NFC-capable models and those in the near future use NFC controllers, it probably won&#8217;t last very long.<\/p>\n<p>These controllers cost roughly $5 per phone. If NFC is widely adopted, it&#8217;ll be much cheaper &#8211; according to some, about $0.50 per phone &#8211; to combine the NFC capability into the baseband processor, much like GPS, Bluetooth and WiFi are now.<\/p>\n<p><strong>Innovision&#8217;s Vision<\/strong><\/p>\n<p>In early June of 2010, Innovision announced that it created a way to <a href=\"http:\/\/www.nfcworld.com\/2010\/06\/04\/33826\/innovision-unveils-next-generation-nfc-phone-technology\/\" target=\"_blank\">greatly lower the cost of implementing NFC<\/a>. Essentially, its Gem NFC IP allows baseband processor manufacturers to combine the NFC capabilities into their &#8220;combo chips&#8221; with the other features like GPS, Bluetooth and WiFi.<\/p>\n<p>Former Innovision CEO David Wollen <a href=\"http:\/\/www.nfctimes.com\/news\/innovision-ceo-steps-aside-acquisition-broadcom-moves-forward\" target=\"_blank\">told the NFC Times<\/a><em> <\/em>that the company believed NFC models starting in 2012 or 2013 would no longer put standalone NFC chips inside devices, but instead would opt for &#8220;combo chips&#8221; supporting the various wireless technologies. It would eventually reduce the cost of embedding an NFC modem in a handset to well below U.S.$0.50, he said.<\/p>\n<p>Just over a week after the announcement, baseband manufacturer <strong>Broadcom<\/strong> (Nasdaq: <a title=\"Broadcom (Nasdaq: BRCM)\" href=\"http:\/\/www.google.com\/finance?q=NASDAQ%3ABRCM\" target=\"_blank\">BRCM<\/a>) purchased Innovision for 47.5 million.<\/p>\n<p>Broadcom will certainly have competition from other baseband manufacturers, such as:<\/p>\n<ul>\n<li><strong>STMicroelectronics<\/strong> (NYSE: <a title=\"STMicroelectronics (NYSE: STM)\" href=\"http:\/\/www.google.com\/finance?q=NYSE%3ASTM\" target=\"_blank\">STM<\/a>)<\/li>\n<\/ul>\n<ul>\n<li><strong>LM Ericsson<\/strong> (Nasdaq: <a title=\"LM Ericsson (Nasdaq: ERIC)\" href=\"http:\/\/www.google.com\/finance?q=NASDAQ%3AERIC\" target=\"_blank\">ERIC<\/a>)<\/li>\n<\/ul>\n<ul>\n<li><strong>Qualcomm<\/strong> (Nasdaq: <a title=\"Qualcomm (Nasdaq: QCOM)\" href=\"http:\/\/www.google.com\/finance?q=NASDAQ%3AQCOM\" target=\"_blank\">QCOM<\/a>)<\/li>\n<\/ul>\n<ul>\n<li><strong>Marvell Technology Group<\/strong> (Nasdaq: <a title=\"Marvell Technology Group (Nasdaq: MRVL)\" href=\"http:\/\/www.google.com\/finance?q=NASDAQ%3AMRVL\" target=\"_blank\">MRVL<\/a>)<\/li>\n<\/ul>\n<p>But the acquisition of Innovision is already reaping benefits as Broadcom officially entered the NFC chip market and already has a head start on the competition.<\/p>\n<p><strong>Broadcom&#8217;s New Line of NFC Chips<br \/>\n<\/strong><\/p>\n<p>On Monday, Broadcom announced the release of <a href=\"http:\/\/www.bgr.com\/2011\/09\/26\/broadcom-intros-new-nfc-chips-for-mobile-payments\/\" target=\"_blank\">the BCM2079x family of NFC chips<\/a>. Broadcom claims that the chipset &#8220;slashes power consumption by more than 90 percent, uses 40 percent fewer components and has a 40 percent smaller board area, making it the smallest and most power efficient NFC solution on the market.&#8221;<\/p>\n<p>&#8220;Broadcom is committed to making NFC as ubiquitous as Bluetooth and WiFi are today,&#8221; Broadcom Vice President and General Manager Craig Ochikubo said.<\/p>\n<p>While this chip doesn&#8217;t quite reach the vision of the complete &#8220;combo chip,&#8221; it&#8217;s a large first step in that direction.<\/p>\n<p><strong>The Bottom Line<\/strong><\/p>\n<p><a title=\"NXP's NFC Future\" href=\"http:\/\/www.investmentu.com\/2011\/August\/nxp-waiting-on-nfc-technology.html\" target=\"_blank\">NXP may still have a solid future<\/a> due to the possible royalties it&#8217;ll receive from patents and licenses. It may even look to acquire or launch a baseband business to keep up with companies such as Broadcom and Qualcomm. But for those bullish on NFC and looking for a leader, it&#8217;s more likely to be Broadcom, or one of the other baseband manufacturers.<\/p>\n<p>In reaction to the Innovision acquisition last June, Ochikubo told the NFCTimes, &#8220;We really feel its perfect timing right now, given increased interest from handset makers and carriers and the maturity of the NFC market.&#8221;<\/p>\n<p>And with the recent confluence of Google Wallet and the Isis news with Broadcom&#8217;s latest release, it looks like Broadcom may truly be right on time.<\/p>\n<p>Good investing,<\/p>\n<p>Justin Dove<\/p>\n<div>\n<a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=FnGv_iib4dg:3Cj6_SEZuTY:yIl2AUoC8zA\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?d=yIl2AUoC8zA\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=FnGv_iib4dg:3Cj6_SEZuTY:V_sGLiPBpWU\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?i=FnGv_iib4dg:3Cj6_SEZuTY:V_sGLiPBpWU\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=FnGv_iib4dg:3Cj6_SEZuTY:qj6IDK7rITs\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?d=qj6IDK7rITs\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=FnGv_iib4dg:3Cj6_SEZuTY:gIN9vFwOqvQ\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?i=FnGv_iib4dg:3Cj6_SEZuTY:gIN9vFwOqvQ\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=FnGv_iib4dg:3Cj6_SEZuTY:F7zBnMyn0Lo\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?i=FnGv_iib4dg:3Cj6_SEZuTY:F7zBnMyn0Lo\" border=\"0\"><\/img><\/a>\n<\/div>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/InvestmentU\/~4\/FnGv_iib4dg\" height=\"1\" width=\"1\" \/><\/p>\n<p>Article by <a href=\"http:\/\/www.investmentu.com\/\" target=\"_blank\">Investment U<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"<p>NFC Technology: What Investors Need to Know by Justin Dove, Investment U Research Tuesday, October 4, 2011 Two recent events have likely ushered the dawn of NFC smartphone technology in the mainstream marketplace. Google (Nasdaq: GOOG) finally released Google Wallet on September 19, Isis announced last week that a handful of major handset manufacturers are &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/www.investmacro.com\/fx\/2011\/10\/04\/nfc-technology-what-investors-need-to-know\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;NFC Technology: What Investors Need to Know&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-24260","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/24260","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=24260"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/24260\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=24260"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=24260"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=24260"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}