Their research – to be finalized during the GSMA Mobile World Congress in Barcelona from Feb. 15-18 – details the potential role of NFC-enabled microSD cards in driving the future development of the NFC market.

“NFC-enabled microSD cards have the potential to offer full functionality, so we are exploring this in more detail in the report,” say Spencer.

Trials of the technology have already demonstrated its basic technical viability, but there are still questions about how it will meet the needs of the developing NFC market.

“The rollout of NFC-based services has been hampered by the classic ‘chicken and egg’ situation faced by the mobile industry, that services can’t be launched on any commercial scale because there isn’t a suitable range of NFC-enabled mobile phones available,” says Spencer. “As the challenges around the value chain – such as the role of the banks, card issuers, trusted service managers and mobile operators and the associated business cases – are being resolved, the next hurdles are the commercial launch of services and customer take-up.”

The report makes the case for NFC capability to be integrated alongside the raft of other features that customers expect on mobile phones, such as multimedia functionality. But it also highlights the challenge of delivering it to a market where customers may be unaware of the technology, or are unlikely to go out of their way to purchase an NFC-enabled phone until there is a sufficient spread of stable, attractive and easy-to-use services that make use of that capability.

“Handset suppliers need the assurance of demand before they will commit to the high development and deployment costs,” says Jefferson. “This certainly explains the delay in bringing a wide range of phones to the market, making the development of new opportunities slow and frustrating.”

Click here to purchase the report.