Nokia planning RFID in phones

Nokia is at work on a cellphone that uses microchips used to store product information and signal their location, the company announced on Sunday.

So-called radio frequency identification (RFID) is a favourite of warehouse operators and some retailers because of how easily product information stored on the chip can be transferred. Nokia said delivering product information to a mobile device using RFID can extend the technology "beyond the supply chain, and into customer service, merchandising, marketing and brand management".

Nokia director Gerhard Romen said that, 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.

At the CTIA Wireless I.T. & Entertainment trade show in San Francisco, Nokia was demonstrating an early prototype that was 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 5140 model, with an RFID reader contained in a shell that attached to the phone.

"It's still very early yet," Romen said on 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 in libraries and elsewhere could spell disaster for privacy. They envision a future in which a network of hidden RFID readers track consumers' every move, their belongings and their reading habits, though most agree that such a scenario is largely impossible today for technical reasons.

Industry players and the US 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, to some industry veterans. During the past few years, cellphones have been tricked out with any number of different wireless antennas -- global positioning systems, Wi-Fi, infrared, Bluetooth and soon ultrawideband -- in order to increase handsets' usefulness.

Ben Charny write for CNET News.com.