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NFC-enabled phone sales top 35m in 2011

Contactless mobile payments are taking off in a big way

Thirty-five million Near Field Communications (NFC)-enabled phones were shipped in 2011, in what has been described as a "breakthrough year" for the mobile payments technology.

According to analyst firm IMS Research, that number could grow to nearly 80 million by the end of 2012, driven largely by the technology being built into a wider range of devices. However, the company highlighted that Apple has so far failed to tap into the mobile payments market.

"Most of the leading cellular handset manufacturers have launched NFC-enabled handsets over the last 12 months. They include Samsung, RIM, Nokia and HTC," said says Don Tait, senior analyst at IMS Research. "Apple is the main player yet to release an NFC-enabled handset."

Mobile phone maker Nokia has been pushing NFC adoption for years, but the technology has been fairly slow to take off. Also known as "wave and pay", NFC is a set of short-range wireless technologies that can beam and receive information at a distance of up to 4 inches, and is currently used in London Transport's Oyster cards. The technology allows consumers to carry out transactions by touching their mobile phone to a terminal.

NFC didn't make its way into the recently launched iPhone 4S, but Apple is expected to include some sort of e-Wallet application with the iPhone 5 when it launches in 2012. Last year the company hired NFC expert Benjamin Vigier from startup mFoundry to product manage Apple's mobile commerce division.

IMS Research also highlights a number of joint ventures and collaborations that have been announced this year between different players of the NFC ecosystem, such as the launch of Google Wallet in the US and Orange UK and Barclaycard's "Quick Tap" contactless payment solution.

Meanwhile, British mobile operators Vodafone, O2 and Everything Everywhere - the T-Mobile/Orange joint venture - announced a partnership in June to create a shared mobile payment system using near-field communications (NFC). The venture aims to bring together retailers, banks and advertisers to speed up deployment of mobile payment services.

According to IMS, showcase events such as the Olympic Games in London will help to promote the technology and its benefits. Everything Everywhere, Telefonica UK, Visa Europe and Samsung have all announced plans to provide NFC at the Olympic Park, and there are also suggestions that Google could launch Google Wallet in Britain in time for the games.

Across the pond, the launch of the ISIS initiative in Austin Texas and Salt Lake City in Utah in the first half of 2012 will also boost the profile of NFC, said the analyst firm. ISIS is a joint venture between Verizon Wireless, AT&T and T-Mobile USA, created to allow smartphone-based NFC payments, using Discover Financial Services to process the payments.

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