Staff Writer, CNET News.com
SAN FRANCISCO—Nokia is at work on a cell phone that uses controversial microchips designed to store product information and signal their location.
Radio frequency identification (RFID) technology is wowing warehouse operators and some retailers because of how easily product information stored on the chip can be transferred. Nokia said Sunday that delivering product information to a mobile device using RFID can extend the technology "beyond the supply chain, and into customer service, merchandizing, marketing and brand management."
For instance, retailers could put RFID-embedded "touch phone here" signs on store shelves to send a coupon to the phone, or put the same signs at checkout stands to instantly transfer personal information stored on the phone in order to complete a warranty, Nokia Director Gerhard Romen said.
At the CTIA Wireless IT & Entertainment trade show here, Nokia was demonstrating an early prototype built in collaboration with VeriSign, which is proposing a central repository for RFID data that companies can use to relay information about inventory and deliveries to customers and suppliers. The prototype was based on Nokia's
"It's still very early yet," Romen said Sunday when asked when RFID phones may become commercially available.
One snag facing RFID is privacy concerns. Consumer advocates say the unchecked spread of the devices could spell disaster for privacy. They envision a future in which a network of hidden RFID readers track consumers' every move, their belongings and even their reading habits, though most agree that such a scenario is largely impossible today for technical reasons.
Industry players and the Federal Communications Commission are working to eliminate the obstacles to the promising technology. Power limitations and varying international regulations are among the challenges that threaten to slow RFID's mass adoption, the FCC said.
RFID's addition to Nokia phones is inevitable, according to some industry veterans. During the past few years, cell phones have been tricked out with any number of different wireless antennas—global positioning systems, Wi-Fi, infrared, Bluetooth and soon ultra wideband—in order to increase the phone's usefulness.