After contemplating the matter for years, Motorola Inc. has decided to jump feet first into the global smart card business.
The Schaumburg, Ill.-based manufacturer has created a new business unit to take advantage of the enormous potential it sees for plastic cards embedded with microprocessors.
Technical advances are transforming what has been a single-application product into a multi-application device, the company said.
Motorola intends to pool its core competencies in chip manufacturing, radio design, software creation, and add its new ability to manufacture plastic cards.
Several years ago, Motorola bought a card manufacturing factory in California, which will allow the company to begin producing some single-application cards by fourth quarter of this year.
The decision to enter the smart-card production business, however, creates one potential problem for Motorola. Its semiconductor sector currently sells chips to the dominant manufacturers of smart cards.
Motorola executives say they aren’t sure how Motorola’s card customers will react to Motorola now being a competitor in the business.
The company took some steps to alleviate the issue. The new division, the Smartcard Systems Business, will be a part of the Land Mobile Products Sector in Schaumburg. That will keep Motorola’s card customers separate from its card business.
Executives said they hope other card manufacturers will want to work with Motorola to develop advanced solutions.
The company highlighted several initial goals for the new unit. First, Motorola wants to be involved in the standards creation process now underway for smart cards. Companies such as Hewlett-Packard Co. have been instrumental in developing work groups such as PC/SC Workgroup, which wants to develop smart card applications for personal computers with open specifications that allow interoperability among smart cards, smart card readers and computers made by different manufacturers.
The PC/SC Workgroup has said that standards are expected to drive the development of the smart card market. Motorola wants to be in that driver’s seat, along with the computer companies.
Along with standards development, Motorola is eying the transit market, and hopes to partner with municipalities interested in giving frequent travelers smart debit cards for easy payment.
By using radio frequency, some cards can send and receive information without coming into physical contact with terminals. These cards-contactless-are a target market for Motorola, along with combination cards.
