NXP BV continues to trade on its technology and the latest decision to license its Mifare technology to STMicroelectronics is as intriguing as any of the recent business moves that have gone before.
LONDON NXP BV continues to trade on its technology, and the latest decision to license its Mifare technology to STMicroelectronics is as intriguing as any of its recent business moves.
NXP has a position in near-field communications and a commanding one in contactless ticketing with the Mifare technology that it has owned since Philips acquired the original Mifare developer, Austria's Mikron, in 1998. Mifare is reputedly the most widely installed contactless smartcard, or proximity card, technology in the world with 500 million smart card chips and 5 million reader modules sold.
And now ST has the right to produce combination chips that include NFC and Mifare technology, presumably to a specification drawn up by someone like Nokia. These are the sorts of technology that allow mobile phones or smart cards to be used for ticketing, access control and micropayments.
Of course, we don't know how much NXP expects to make in licensing fees from the deal, but every unit royalty it receives means one chip sold by ST and, conceivably, one less sold by NXP. In other words, NXP would be foregoing a chip sale for a royalty payment.
Nor do we know if NXP has been told by an upstream customer that this licensing deal is preferred or necessary, perhaps to provide a second source, although that might explain the latest selling of the NXP's technology.
NXP has emphasized that multiple sources for multiple parts of the Mifare infrastructure have been key to the technology's success (see Mifare success was built on multiple sources, says NXP).
In other words better to grow a bigger pie by sharing technology with rivals than to have all of a smaller pie; co-operation with competitors, otherwise known in the newspeak as co-opitition.
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