Sony Ericsson has announced that it will incorporate Near Field Communication (NFC) chips in all its smartphones running Android. Its chip of choice is the PN65 manufactured by NXP Semiconductors.

This is a bold second step after Sony Ericsson announced last April that it would hasten its shift towards Android-based smartphones.

Adding NFC capability to smartphones will help make consumers’ experience with their smartphones much better, especially since Sony Ericsson’s primary focus is on entertainment and communications.

NFC chips enable smartphones to perform secure, short-range mobile transactions wirelessly. For instance, a smartphone can be used to pay for purchases or redeem virtual gift cards and coupons.

The NXP PN65 NFC chip already comes with the required radio controller, the secure element, and software. NXP claims to use advanced cryptography to provide superior-level security for transactions done through the PN65. The cryptographic technology is already widely used in many contactless solutions such as bank cards, e-passports and e-ID’s, and secure access systems.

The same NXP chip is already on the Google Nexus S 4G (on Sprint), which allows it to take advantage of Google Wallet, a system allowing users to use Android phones as virtual wallets.

The NXP chip will definitely be on all of Sony Ericsson’s upcoming Android smartphones. The company, however, did not specify whether they will carry out a solution for putting NFC chips on its existing Android devices.

Will adding NFC chips to Android phones help Sony Ericsson stay on the mobile handset market map? Let’s wait and see.

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