Leading NFC chip vendor NXP has dampened its previous enthusiasm for the number of handsets that will be shipped this year based on the short-range wireless technology. Previously, the company had predicted a range of 40 million to 100 million NFC-based handset shipments in 2011. Now the company has downgraded its forecast. “We currently see the ramp as being towards the lower end or perhaps slightly below our initial range for 2011,” said Richard Clemmer, NXP’s chief executive officer, speaking on a conference call for the company’s Q2 2011 financial results. The reason for lowered optimism is the speed at which mobile operators are implementing NFC technology. Clemmer pointed to “the formulation and agreement on the specific business models to support the ecosystem” as a factor behind the shortfall. He also cited “the business challenges” faced by some handset manufacturers. However, Clemmer insisted that NXP still retains its optimism about the longer term prospects for NFC and the mobile payment market.

Despite concerns over mobile operators’ implementation of NFC technology, the level of adoption among handset vendors is strong. NXP chipsets are designed into 60 unique NFC handset designs.  Clemmer said he was “pleased with adoption and design win momentum” among vendors. The next step he said is “mobile operator adoption”.  Two items of goods news for NXP in the second quarter were Google’s announcement of its eWallet based on the company’s NFC solution and Sony Ericsson choosing NXP’s chipset for its NFC-based Android handsets.  In its results, the company reported that its high performance mixed signal (HPMS) unit, of which its NFC business is a small part, reported revenues of US$779 million, a growth of five percent quarter-on-quarter and eight percent on a year-on-year basis.