Sony, Carrier Join on 'Smart Card' Phones
By Yuri Kageyama, AP Business Writer
October 27, 2003

TOKYO (AP—Sony Corp. and Japan's top mobile phone carrier, NTT DoCoMo, plan to cooperate in developing a system that will allow people to use their cell phones to pay for train tickets or buy items in stores.

They plan to create a FeliCa Networks joint venture, to be set up in Tokyo in January, that will develop a new chip that integrates mobile phones with smart card technology developed by Sony, the companies said Monday.

The smart cards, which have an integrated circuit chip embedded in them, can communicate with special equipment that allows card-owners to pass through train station gates or make payments at cash registers in stores.

Sony will be a 60 percent investor in the 6 billion yen ($55 million) venture, and NTT DoCoMo will invest the other 40 percent.

NTT DoCoMo plans to test the service with 6,000 mobile phones in December in Japan, and handsets with the technology will probably go on sale here by the middle of next year, officials said.

NTT DoCoMo has scored success in Japan with its Internet-linking mobile phone service called "i-mode," which has 40 million users. People use i-mode to look up train schedules, exchange e-mail and download pictures.

"DoCoMo is credited with changing the cell phones of the world with i-mode," said Sony chief executive Nobuyuki Idei. "The joint venture features the unique combination of Sony and DoCoMo."

Sony's FeliCa smart card technology, developed in 1988, is widely used in Japanese train systems and is also used in Hong Kong.

Promoters believe the FeliCa technology has the potential to grow into a global standard, and NTT DoCoMo said it hopes to offer the service overseas.

The main source of revenue for the joint venture will come from licensing fees, and the company does not expect to make a profit for the first few years, said venture president Soichi Kawachi.

The system will be made available to rival carriers as well as service providers and other companies, officials said.

NTT DoCoMo Chief Executive Keiji Tachikawa told reporters he would like to see the technology become a standard feature in all DoCoMo phones.

"The joint venture is the first step into the future," he said.