Another Day, Another Apple NFC Rumor

by: Michael K. Dawson

The following hit my Twitter stream on yesterday:

According to two people with knowledge of the inner workings of a coming iteration of the Apple (NASDAQ:AAPL) iPhone — although not necessarily the next one — a chip made by Qualcomm (NASDAQ:QCOM) for the phone’s processor will also include near-field communication technology, known as N.F.C. (NY Times).

It was only six months ago (September 2010) that Qualcomm was singing a different tune on NFC:

Qualcomm Inc. has no immediate plans to bring near field communications (NFC) into its semiconductor offering for makers of mobile handsets. Even though Qualcomm has engineers working on NFC it is not offering its own silicon and steers handset makers to work with third-party suppliers of NFC chipsets. (EE Times)

Obviously companies keep their plans close to the chest and apparently that was the case (February 2011):

Qualcomm announced that its latest mobile chipsets will have Near Field Communication (NFC) technology on board. Qualcomm is working with its technology partners to add NFC support to its Mobile Station Modem chipsets. (Phone Scoop)

My first thought was this seems like a risky move for Apple to adopt an unproven solution. NXP Semiconductor (NASDAQ:NXPI) is considered the market leader in NFC technology and reportedly was working with Apple last year (TechCrunch). That being said, Apple and Qualcomm’s relationship has gotten much stronger. Apple could have had engineers sitting side-by-side with Qualcomm as this solution was being crafted -- something that would not have been possible with NXP’s solution.

It will be interesting to see which chips Qualcomm integrates the NFC capability into. Broadcom (BRCM) reportedly provides Apple’s Wi-Fi/Bluetooth connectivity (iFixit). Broadcom could be at risk in the next iPhone.

Disclosure: Long Apple, NXP Semi, Qualcomm