Businessweek: NFC Stickers Make Smartphones Smarter

Businessweek: NFC Stickers Make Smartphones Smarter

Talked to Businessweek about the potential and the future of NFC.

NFC Stickers Make Smartphones Smarter

By Olga Kharif

In the fall, Toronto resident Pearl Chen placed quarter-size stickers on the 30 or so spice containers in her kitchen. Now whenever she taps her Samsung smartphone against a bottle of turmeric, say, the device does a Google (GOOG) search for recipes featuring the spice. “I can scan it and get ideas for what to cook,” says Chen, 31, the founder of Karma Laboratory, a technology startup focused on education. She sees the stickers as a way to squeeze a bit more utility from everyday objects, which usually “just stand there and don’t say very much.”

Chen is an early adopter in the world of programmable tags, pieces of paper or plastic that sell for a few bucks apiece and communicate with gadgets via a short-range radio technology known as near field communication, or NFC. They can be customized to trigger an action on any phone with an NFC chip: Tap the phone against a tag on a business card to automatically download contact information, for instance, or tap a tag on your nightstand to set the morning alarm. “It’s very convenient,” says John Devlin, an analyst at ABI Research.

NFC tags are gaining a following as the number of smartphones able to scan them skyrockets. This year the research firm IHS iSuppli (IHS) expects manufacturers of smart devices will ship nearly 21 million NFC-enabled handsets in the U.S. and 186 million worldwide, up from 93 million last year. According to press reports,Apple (AAPL) is considering adding an NFC chip to the new iPhone expected this fall, which would give the technology a significant boost.

The tags are available from independent websites, and ABI estimates that by the end of this year there will be about 10 million of them in the U.S. as major mobile companies begin marketing them as a must-have feature. Earlier this year, Sony (SNE) began selling $20 SmartTags that can change the volume or launch news or weather apps on the company’s Xperia phone. In the past month, Samsung started selling TecTiles, a $15 package of five NFC tags, in T-Mobile (DTE) and Sprint (S) stores and will soon make them available on (AMZN). Some of the tags come already programmed to do a specific task, while others require users to download an application to customize each tag with one of several dozen possible actions.

Tagstand, which sells NFC tags and develops the software to program and manage them, was founded a year ago and now employs seven staffers. Its revenue tripled over a three-month period to $30,000 in May, the company says, and Tagstand expects to be profitable within six months. “We think the opportunity is massive,” says Chief Executive Officer Kulveer Taggar, a Brit who uses NFC tags to check into the location-based service Foursquare at his boxing gym. Tagstand has sold about 1 million NFC tags in the past year, and in June the company released a mobile app that simplifies the tag-programming process.

Some of NFC’s biggest advocates are event planners, who hand out specialized gear integrating NFC tags that can be scanned at stations set up around a venue. In May a third of the attendees at the Manhattan Cocktail Classic, held at the New York Public Library, used NFC-enabled bracelets that were linked to their e-mail addresses. As partygoers sampled the hundreds of cocktails available, they could tap their bracelet against NFC readers to have recipes sent to them.

On June 7 roughly 1,000 people at the Lobster Roll Rumble in New York City’s Metropolitan Pavilion used NFC bracelets to vote for their favorite crustacean dish. “Everyone thought it was the coolest thing,” says Kai Mathey, director of communications for event organizer Tasting Table, which paid Tagstand about $6,000 to set up the system.

Scanning NFC tags could become commonplace as they make their way into stores and books and onto movie posters. Says wireless-industry analyst Chetan Sharma: “Just like Google has become the starting point of interaction with information on the Web, NFC could become the starting point of interaction with the physical world.”

The bottom line: With nearly 21 million NFC phones shipping in the U.S. this year, early adopters are expected to deploy 10 million programmable tags.