An announcement this past June from Nokia, and more recent announcements from Google, RIM, and the AT&T, Verizon, T-Mobile and Discover Card Joint Venture (JV), provide a clear direction that mobile devices will be NFC-enabled (i.e. near field communication) and readied for mobile payments (i.e. m-Payments) in the next 18 months.
A Juniper Research report suggests that 1 in 6 mobile phone users will have NFC-enabled handsets by 2014, while IMS Research said that the number of locations accepting contactless payments will grow to over 12.5 million by the end of 2013. NFC technology is generally referred to contactless technology and has become available over this past decade due in part to the charters of the NFC Forum and Smart Card Association, which were formed to advance the NFC/contactless technology. At a high-level, NFC technology is based on inductive (electromagnetic) coupling of two antennas (or wires), where a current is generated in the (passive) receiving antenna, and consequently creates energy in the receiving side without the use of a battery. It operates at 13.56 MHz with a bandwidth of 14 kHz, it has a data rate of up to 848 kbits/s, and a set up time of less than 100 msecs (milli-seconds). In addition, it transfers data or information over-the-air at a distance of up to 20 cm (centimeters) between two devices.
The introduction of “contactless technology” in cell phones for mobile applications was a “contactless wallet” by DoCoMo in 2004 in Japan. Then Nokia introduced “NFC standard technology” beginning with the 6131 in January 2007, and then with their 6212 in April 2008. NFC technology has gone through hundreds of trials globally over the past decade that range from poster reading, to transit payments, including high-value financial transactions, with participants from the semiconductor, handset, carrier, hotel, credit card and banking industries as well as local governments. There are three major application areas for NFC technology: simple pairing, sharing content or information and small files, and m-Payments.
Simple pairing application allows for an easy and secure connection between handsets or any two devices that have Bluetooth (BT) and Wi-Fi technologies. The Bluetooth SIG (Special Interest Group) incorporated NFC in BT v2.1 release for simple pairing as an OOB (out-of-band) feature, and the Wi-Fi Alliance has also included NFC as an option for their Wi-Fi Protected Setup (WPS) feature. The OOB link transfers device credentials: control, key or address information that are non-data oriented, between devices. The fast set up time and short distance between devices provides a secure and temporary connection that allows the handsets’ BT or Wi-Fi to then quickly sync with minimal user interaction before transferring content or large files (at the higher speeds).
Sharing information and small files application allows a user (or users) to simply transfer information without having to “pair’ between devices. One application is when a user wants to read or download information from a NFC-enabled poster (a.k.a. smart poster), such as a train schedule or an overview of a movie. The user opens the NFC application on their handset and touches their handset to the NFC tag located on the poster. The tag (represented by a NFC icon or logo), has the information programmed into it, and this information is transferred to the handset. The same basic process applies when transferring small files or other information between handsets.
M-Payments application is the most complete use of NFC technology in that it requires an NFC radio chip as well as a SE (Secure Element) chip. These two chips together with the handset’s SIM (Subscriber Identity Module) card create a secure and convenient conduit for financial transactions to take place. As described in the JV announcement between AT&T, Verizon, T-Mobile and Discover Card, called ISIS, mobile payments (using credit and debit cards) are one facet of the solution. Coupons, transit passes, tickets and reward cards also can be carried “digitally” in an e-wallet, eliminating the need to carry plastic cards in your personal wallet.
For a successful adoption of NFC in handsets, however, a worldwide standard must be followed and an ecosystem primed to manage the fusion of applications. NFC technology has been approved as ISO, ECMA and ETSI standards, and Japan’s DoCoMo, which introduced contactless technology in cell phones in 2004, is transitioning to the NFC technology standard. Europe, Australia, parts of Asia (e.g. Singapore) and North America are embracing NFC and realize that participation across the industry is crucial for its success. Greater collaboration is needed, though, to develop and extend the ecosystem so NFC-enabled handsets and other devices will be seamless, secure and reliable when used globally…(a white paper to follow).
The next generation 4G networks - LTE-Advanced and WiMAX 2 - are well positioned to provide the bandwidth/throughput demanded by Mobile and Portable devices as well as fixed equipment (e.g. CPE and backhaul), as mentioned in my blog on Nov 8th.
The highest data traffic usage is video – streaming video, Flash, Internet TV and general video files – and together with other IP-based applications becoming available, will drive data traffic as they become more widely used. An article released Nov 15th – “Operator Says LTE Subscribers Using 15 GB Per Month!" (http://gigaom.com/2010/11/15/wireless-vs-wired-broadband/), conveys that operators are already seeing the present LTE networks growing data traffic demand.
At a recent LTE Forum, Deutsche Bank analyst Brian Modoff provided data traffic information from Sweden's Teliasonera:
1) Smartphone user on their networks consumed 375 MBytes/month of data.
2) The average "broadband" user on their network is largely 3G data cards and consumes 5 GBytes/month.
3) The average LTE consumer, however, which are essentially all data card, used 14 GBytes to 15 GBytes/month of data.
Although this is a single carrier’s information, and Teliasonera was the first operator to deploy LTE, this increasing data traffic demand should alert as well as prompt carriers to move quickly to LTE-Advanced and WiMAX 2 networks since Mobile devices (e.g. Smartphones, and Tablets such as iPad) and Portable devices (e.g. laptops with data cards) with ever demanding applications are growing in popularity.
Obviously it’s a business case decision – ROI: present pre-4G rollout versus upgrading to 4G – but new consumer electronic (CE) products are making their way onto the market with LTE and WiMAX technologies built-in...the “wave is coming”.
Smartphones, laptops and other wireless broadband devices are going to require more bandwidth as future apps and hardware technologies advance. WiMAX (Worldwide Interoperability for Microwave Access) and LTE (Long Term Evolution) and are two very similar wireless broadband technologies that can accommodate the bandwidth demands, yet the two technologies are competing for virtually the same markets and sockets. Now that IEEE 802.16m (i.e. WiMAX Release 2 or WiMAX 2) and LTE Release 10 (i.e. LTE Advanced) are both approved1 as an IMT-Advanced technology – the 4th generation (4G) cellular wireless standard – it’s time these two technologies officially merge, or at a minimum, work together as complementary solutions.
About – WiMAX and LTE
WiMAX started as a fixed technology that evolved from the IEEE 802.16 standard, targeting wireless broadband connectivity for the “last mile” to the rural areas, SMB and backhaul, where services were needed and laying cable was not feasible. IEEE 802.16-2004, also known as 802.16d, refers to the working party that developed the standard. It is sometimes referred to as "Fixed WiMAX," since it has no support for mobility. IEEE 802.16e-2005, also known as 802.16e, is an amendment to 802.16-2004. It supports mobility and is known as "Mobile WiMAX" and provides greater flexibility and broader market appeal than its predecessor. The latest version is called WiMAX Release 1.52.
In comparison, LTE started as the next generation cellular technology that evolved from GSM/EDGE and UMTS/HSxPA/HSPA+ network roadmap and is still a project of the 3GPP (3rd Generation Partnership Project), formed by ETSI (European Telecommunications Standards Institute). It offers a set of enhancements to the UMTS (Universal Mobile Telecommunications System) and was introduced in “3GPP Release 8”. The latest version is called 3GPP Release 93.
WiMAX and LTE camps have been steadily rolling out their respective technologies and capturing their share of POPs (i.e. population served), with WiMAX having an established market base, globally. There is a competitive push by each camp to be the next generation wireless broadband technology which is reminiscent in many ways of the “CDMA versus TDMA” battle in the US over a decade ago.
Update – WiMAX and LTE
The present versions of WiMAX and LTE, which are considered pre-4G technologies are deployed and in mobile and portable devices. Additionally, WiMAX is used in femto/pico-cells and for backhaul. As new wireless devices with higher-performing hardware technology, e.g. high-definition (HD) video capability, roll out over the next few years an increase in data traffic will drive the demand for greater bandwidth, and WiMAX 2 and LTE Advanced are poised to fill the need.
ITU (International Telecommunication Union) subgroup ITU-R’s Working Party 5D (i.e. WP 5D) approved the “WirelessMAN-Advanced” technology of IEEE 802.16m as an IMT-Advanced technology at their meeting in Chongqing, China, ending Oct. 21st. IEEE will complete and submit the technology specification at the following WP 5D meeting in April 2011.
The detailed specification of WiMAX 2 will be incorporated in the WirelessMAN-Advanced capabilities along with additional technology requirements such as improved VoIP (voice-over-internet-protocol) capacity, spectral efficiency, latency, handover speed, cell range, coverage and support for wider operating bandwidth in both TDD and FDD modes.
Final ratification of LTE Advanced will occur at the ITU meeting in November 2010 and will have virtually the same technology requirements as WiMAX 2. WirelessMAN-Advanced and LTE Advanced were the only two technologies approved for IMT-Advanced1.
IMT-Advanced was developed with applications and features that enhance its usability over its predecessors. Some of these are: Quality of Service (QoS) and rate requirements for 3G applications like mobile broadband access, Multimedia Messaging Service (MMS), video chat, and mobile TV, as well as new services such as HDTV. IMT-Advanced will also allow roaming and to interact with digital video broadcasting systems4.
Some of the IMT-Advanced technology requirements are4:
•Flexible channel bandwidth, between 5 and 20 MHz, optionally up to 40 MHz.
•Nominal data rate of 100 Mbit/s (megabits per second) for a mobile client relative to a station, and 1 Gbit/s (gigabits per second) for a fixed client relative to a station.
•Smooth handoff across heterogeneous networks, seamless connectivity and global roaming across multiple networks.
•All IP packet-switched network.
•IPv6 support.
•MIMO (Multiple-Input and Multiple-Output) antenna support.
•Frequency-domain statistical multiplexing – OFDMA or Single-carrier FDMA.
•Channel-dependent scheduling to utilize the time-varying channel.
•Link adaptation: adaptive modulation and error-correcting codes.
Market and Product Information
TeliaSonera launched the world’s first commercial LTE network in Oslo and Stockholm in December 2009, with Asia Pacific and North America driving the first major wave of LTE rollouts in 2010 through 20125. Infonetics estimates the LTE infrastructure market is expected to reach US$5 billion by 2013 and US$11.4 billion by 2014, fueled by E-UTRAN macrocell (eNodeB) deployments6.
Based on public announcements made by service providers planning LTE services, the number of LTE service subscribers is expected to exceed 72 million by 2013 and 153 million by 2014, with most of them split between Asia Pacific and Europe, the Middle East, and Africa (EMEA), according to Infonetics6. For the first few years of its deployment, LTE will be predominantly “PC-based” (laptops, netbooks, dongles, etc.). And mobile devices will soon incorporate LTE – LTE-based (Android) Smartphones and Tablets will become available in 2011.
The WiMAX equipment market, which includes active WiMAX subscribers, will reach annual sales of US$4 billion in 2014, up from over US$2 billion at the end of 20087. Maravedis also estimates there will be over 75 million WiMAX subscribers worldwide by the end of 20147, about half the number of subscribers estimated for LTE.
Samsung released the first WiBro (i.e. Korean brand name of Mobile WiMAX) mobile phone in November 2005, and Russia’s Yota released the first GSM/WiMAX mobile phone by HTC, Max 4G, in November 2008. In 2009, Samsung released Mondi, a WiMAX-based internet access device running Windows Mobile, and HTC released their WiMAX phone, called EVO 4G, in June 2010. Similar to LTE-enabled products, most WiMAX-enabled products on the market today are laptops. Mobile devices (e.g. Smartphones), and especially portable devices (e.g. laptops), are products that will benefit from the higher speeds offered by WIMAX 2 and LTE Advanced.
Smartphones and Laptops/Mobile-Ready Portables are the main markets that will drive the demand for greater wireless bandwidth. According to ADO Strategies’ blog on global device market size, Smartphone sales in the US are to surpass standard mobile phone sales in 2012, and the world mobile broadband services market will reach 1 billion subscribers in 20138. The Global Smartphone Market breakdown by platform is shown in Figure 1.
Figure 1
Smartphones contain more advanced hardware technology (than standard mobile phones) and therefore enable a richer mobile experience – such as taking and viewing high resolution videos, and sharing them. Infonetics predicts that the video services market will surpass the voice services market by 2011, and in addition, the residential voice, data and video services market will reach US$300 billion in 20139.
Furthermore, video encode (i.e. taking a video) and decode (i.e. viewing a video) technologies in Smartphones will continue to improve and 720p resolution (i.e. high-definition, or HD, video) and higher will be a standard for all high-end Smartphones beginning in 2011. These HD videos translate to larger file sizes and require greater bandwidth to pass through the network, which increases the data traffic. Cisco predicts that the mobile-centric market segment will reach 3,600,000 terabytes (or 3.6 exabytes) per month by 201410, see Figure 2. Mobile Video use will be the predominate driver of mobile data traffic at 66%, and the next greatest mobile data traffic driver will be Mobile Web/Data at 17%. These two applications are estimated to consume on average over 83% of the mobile data traffic per month in 201410.
Figure 2
From a product perspective, Laptops and Other Mobile-Ready Portables will consume the greatest amount of data traffic, according to Cisco10, see Figure 3. Laptops and Other Mobile-Ready Portables are estimated to consume 70% and Smartphones are estimated to consume 21% of the data traffic, and these two product categories are estimated to use on average about 91% of the mobile data traffic per month in 201410. The CAGR (Compound Annual Growth Rate) for mobile data traffic growth is 108% per year from 2009 through 2014. It is apparent that over the next several years as mobile and portable products become equipped with advanced technology, mobile data traffic will grow and higher bandwidths will be required to accommodate the demand. WiMAX 2 and LTE Advanced will roll out in 2012 and 2013, just as data traffic demand is growing exponentially.
Figure 3
A Perspective
WiMAX 2 and LTE Advanced have very similar technical foundations and both meet the IMT-Advanced (4G) requirements. In many geographic areas (and markets) their networks will overlap, while in other areas they will not overlap. The question then becomes: how can these two wireless broadband technologies coexist and complement each other?
For these two technologies to coexist and complement each other they have to be managed as a system. Since 4G is a compilation of wireless standards, the final form of a 4G device will be comprised of various standards, i.e. 4G/3G/2G. A software defined radio (SDR)11 could enable these two technologies to coexist in a single solution, minimizing the power consumption, total die area and package size (or footprint), which would reduce the area used in size-constrained mobile or laptop products.
Each technology could be implemented with algorithms on both the network side and device side that minimize power consumption while managing and reducing the data traffic for either network. For example, if one technology is being used for data or voice communication to/from the network for a Smartphone or laptop, then the other technology could also be used as a soft-femto cell or for backhaul to off-load data traffic in highly-congested areas, increasing the probability of a high-level of QoS for video and voice traffic.
Another consideration is VoIP support for 2G/3G and 4G networks. Starting a voice call on a 2G/3G network and handing off to a 4G VoIP-based network, and vice versa, is still a challenge. Handing off a VoIP call, on the other hand, between IP only networks, whether it’s LTE, WiMAX or Wi-Fi, isn’t an issue, and there are standards written as well as VoIP solutions available that support this scenario12, 13.
Starting a voice call from a circuit-switched network and transitioning to a packet-switched network, and vice versa, is more challenging especially if a single number is maintained for the user. The challenge is maintaining a smooth seamless transition of the voice call and keeping a single (billing) phone number, which may or may not be solvable in the near-term for mixed networks.
Carriers, consumer electronic (CE) product companies and semiconductor companies are faced with challenges and should strategize around the ecosystem progress and timing to determine the best scheme(s) to integrate WiMAX 2 and LTE Advanced technologies into their system solution – networks and devices – to optimize and maintain the best user experience possible as more “data traffic demanding” products become available and as the demand for services continue to grow.
Note:
If you have an interest in testing your mobile device’s internet speed – see Cisco’s Global Internet Speed Test (GIST) apps for iPhone and BlackBerry Storm Smartphones.
I have over 18 years of mobile and RF/wireless marketing, management and product development experience in systems, apps and consumer electronics products. I follow technological convergence, market trends and ecosystems, and write about them. My work experience has been with wireless and mobile start-ups as well as several Fortune 500 companies in the semiconductor and consumer electronics markets - Palm Smartphone Marketing, SanDisk A/V BL, and Philips Semiconductors (now NXP).
