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By Harro Ten Wolde
FRANKFURT, Sept 10 (Reuters) - Apple Inc's moveinto mobile payments, announced on Tuesday with the launch ofits new iPhone 6 phones and the Apple Watch, is expected to givea boost to the wireless technology behind it, called near-fieldcommunications (NFC), analysts and makers of the technology say.
All the new Apple devices will come equipped to operate itsnew payments service "Apple Pay", which launches in the UnitedStates next month and allows users to pay for items in stores bytapping their phone on contactless card payment terminalsinstead of the underlying credit or debit card.
For Apple Pay to work the new devices come with a "secureelement" chip and a near-field communications, or NFC, antenna.
The NFC segment is dominated by NXP Semiconductors,which invented the technology with Sony. Qualcomm, Broadcom, MediaTek and STMicroelectronics are its main competitors.
"NXP Semiconductors definitely will be happy with thisdevelopment," said Juniper analyst Windsor Holden.
Shares in NXP Semiconductors have been hovering aroundall-time highs in anticipation of Apple's move into mobilepayment.
Asked whether NXP supplies Apple with its NFC chips for thenew iPhone, the company declined to comment. Apple suppliers aresworn to secrecy.
NFC technology has been around for more than a decade but sofar hasn't taken off widely, even though it is seen as a safemethod of making mobile payments, as the wireless technologyonly works when two devices are brought close together, whichmakes interference or eavesdropping from outside almostimpossible.
With Apple Pay an additional layer of security is providedwith use of the iPhone device protected by Apple's Touch IDfingerprint scanner.
But retailers have been reluctant to invest in the necessaryscanning and tagging infrastructure, limiting its scope tosmall-scale ventures like one between Starbucks, Orange, Samsung and Barclays in Britain.
HALO EFFECT
Analysts at Gartner estimate the value of mobile paymentswith NFC will rise to almost $22 billion by 2016 - still lessthan 5 percent of a global payments market dominated by SMS textmessaging - from less than $5 billion last year.
One of the niches where it has been successful is in gaming,where for instance Activision Blizzard uses it toconnect physical action figures to consoles like Microsoft's Xbox, Sony's PlayStation and Nintendo's Wii.
Juniper's Holden expects that Apple will now introducemobile payments to a wider audience, creating a "halo effect".
Google's NFC-based mobile payment system, GoogleWallet, was also expected to give a crucial boost to the marketwhen it was introduced in 2011.
But with Apple Pay's first use made easier, if desired, byconnection to what it says amounts to "hundreds of millions" ofcredit and debit cards already stored in users' iTunes accounts,along with its partnerships with household retail names in theUnited States like McDonald's, Disney and Walgreen, who are needed to provide the paymentterminals, Apple may succeed where others have failed, saidanalysts.
"If consumers start using NFC for proximity payments thenmerchants will be more prepared to invest in it, a key factorthat has held NFC back," said analyst Eden Zoller at Ovum.
Holden expects the segment "if not to soar, then at least totake to the air, rather than just flap around rather pitiably aswas the case in previous years".
Germany's Wirecard, which makes electronic paymenttechnology, said on Wednesday it saw the Apple Pay announcementas a strong additional push for mobile payments and NFC.
But analysts at Warburg Research cautioned that it may takea while in certain large markets like Germany, where only about30,000 out of a total of 800,000 retail payment points can takeNFC payments.
"It will take some time before penetration in Germany issubstantially increased," said analyst Jochen Reichert, who hasa "buy" rating on shares in Wirecard. (Editing by Greg Mahlich)
