Mobile World Congress indicates NFC moving to mass market

It’s that time of year again, so along with many of my peers I went to the GSMA Mobile World Congress in Barcelona, the annual festival for the mobile industry. There were 60,000 people there this year. You can’t not go, even if you don’t look forward to trudging around with 60,000 fellows! Since some of our biggest customers are there, we’re there, and that’s all there is to it. Actually, there was an extra factor: the GSMA had kindly invited me to be one of their awards judges— I voted in the “Best Mobile Money Product or Solution” category—so I was there for the awards dinner as well.

The big news was, of course, the whole Nokia/Microsoft thing. But the news that I was really interested in was the stuff about shaping and control the value network around secure transactions which, in the first instance, means getting decent penetration of NFC handsets and, in the second instance, the war over the secure element (SE). This was a good show for NFC. NFC isn’t new to the show—or to Spain, where Visa has been running a trial in Sitges for a year.

The phone for the Telefónica trials, the Samsung S5230, known as the Star or Player One, is an EDGE handset–not a 3G phone. But Samsung said it is one of the handset maker’s top sellers.

[From New Samsung NFC Phone Gets First Trial in Spain | NFC Times – Near Field Communication and all contactless technology.]

It’s also a Single Wire Protocol (SWP) handset that implements the “GSMA NFC” model where the SE is on the UICC and under the control of the mobile operator, who hopes to rent security domains (SDs) to banks and others. And this is where things were different at the show this year: SWP/UICC isn’t the only game in town any more because of the spread of embedded SEs and removable SEs (eg SD cards).

The NFC interface is all the rage. ZTE said all of their new handsets would be NFC, Nokia had already said that all new smartphones announced in 2011 would be NFC, Blackberry said NFC was central to their strategy, an NFC iPhone is rumoured. Some of these handsets contain their own SEs. For example, the Android Nexus. How many times have I bored people to death on this blog, and at conferences, by complaining that the business side of some organisations (and their management consultants) don’t understand the relationship between nerdy technical decisions being made over the last couple of years and the business models that they enable or constrain? One of the first of the mass-market NFC_enabled handsets, the Google Nexus S, illustrates this rather well. The onboard SE is the widely used SmartMX.

The Nexus S comes with a PN65N from NXP. This chip is a combination of the PN544 NFC controller and an embedded SmartMX secure element.

[From Uncovered: The hidden NFC potential of the Google Nexus S and the Nokia C7 • NFC World]

This means, of course, that anyone with access to the SmartMX embedded SE can run secure applications (eg, credit cards) without going through the operator’s TSM etc. You may even have applications split between the two, so your O2 Money prepaid card is on your UICC (say) whereas your Visa debit card is in the handset. Both of them could be accessed through the same mobile wallet. Note that in order to create and access SDs you need keys—a big part of of our work on other mobile secure applications to go into various handsets (eg, for banks) is working out the key management strategies for these Global Platform (GP)-based SEs—so someone is still in control of the SE (hint: not the operator), but the framework in which you can do this is there.

Here’s what we did next: Download the source (actually from CyanogenMod 7 to have the full build environment for the new Nexus S), make the appropriate changes to the code, recompile everything and put it back into the phone and it works — Nexus S supports card emulation and SWP… Then we developed an Android app which we call “The Secure Element Manager” that gives the user full control over the secure element in the phone as well as the NFC chip.

[From Uncovered: The hidden NFC potential of the Google Nexus S and the Nokia C7 • NFC World]

This is getting so interesting. In the early days of NFC, I wrote once or twice about the need for “open” SDs (that is, SE SDs that are not under the control of the mobile operator) because I suspect they will be the home of innovation. Perhaps all Android handsets should come with one open SD on the SE for people to experiment with. Of course, there still has to be a structure for, say, banks to obtain their SDs (you wouldn’t want to share an SD with anyone else, because the SD contains things like security keys).

Talking about Android, that really was the story of the show, I think. (Someone joked that next year they should call it the Android World Congress.) I even know a couple of people who have switched from iPhones to Android, which seems to be a barometer of change!

All in all, the show was a great place to catch up with a whole bunch of friends from around the industry and the exhibition was mildly interesting (to me, I stress, since I don’t really care about adding Facebook buttons to phones and that sort of thing), but satisfactory progress on the inevitable march towards mass-market digital money and victory in the war against cash that has been made winnable by the device formerly known as the mobile phone.