NFC phone forecast heavily revised

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NXP Semiconductors’ sharply lower forecast for NFC phone shipments for 2011 comes as little surprise to many, who point to delays in handset shipments and failure by many mobile operators to firm up their NFC business plans.

CEO Richard Clemmer late last week told financial analysts that NXP, the largest supplier of NFC chips worldwide, was expecting only 40 million NFC handsets or fewer to be shipped during 2011-a much lower projection than the 70 million the Netherlands-based chip maker had been forecasting.

Clemmer made the statements less than three months after he suggested NFC phone shipments could approach 100 million this year, if Google’s enthusiastic forecasts for Android-based phones came to pass. He added at the time that there was ‘variability’ in the shipment forecasts, and they could drop to 40 million to 45 million.

But NXP most often pushed the 70 million prediction. Now NXP’s latest estimate for NFC phone shipments appears to be less than even the low-end of its range, that is, fewer than 40 million phones for 2011, using chips from all suppliers.

NXP also had earlier forecast shipments would double in 2012 to 140 million to 150 million handsets. That 2012 projection will also be lower, said Clemmer, as handset makers delay their shipments of NFC-enabled smartphones and feature phones by one to two quarters. He noted, however, that the NFC ‘opportunity is just as significant,’ and handset makers have at least 60 NFC models under development using NXP chips.

‘Things have definitely been encouraging this year, but the launches, which we have seen so far, have been tentative or limited in some way,’ comments John Devlin, an analyst for ABI Research. The research firm, once known for its overly optimistic forecasts of NFC phone shipments, predicted early this year that only 35 million NFC phones would be shipped for all of 2011-a pessimistic forecast at the time. The firm resisted increasing that forecast despite the rosy forecasts in May from NXP. Devlin projects 80 million to 100 million NFC phones will be shipped in 2012.