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Brain trust formed for smart cards

Motorola and Schlumberger launch major initiatives in smart cards for electronic commerce and network security.

Giants Motorola (MOT) and Schlumberger (SLB) today announced major initiatives in smart cards, credit cards with an embedded chip that are growing in popularity for electronic commerce and network security.

Underscoring its view of smart cards as a hot-growth area, Motorola created a new smart card division, thus adding to its current business of selling microprocessors to smart card manufacturers. It expects to benefit from its work in radio frequency systems and software and will announce specific products, partnerships, and alliances in the future.

Schlumberger is targeting network security with its SafePak offering and expects to ship initial products this month.

"Our decision to provide a total solution to the smart card market comes at a very crucial time in this industry's development," said Christopher Galvin, who took over as Motorola's CEO in January. "We believe consumers are going to demand more functionality, higher standards of security, and greater ease of use from their smart cards.

Dataquest, predicts the market for smart cards, also called chip cards, will grow from 544 million units in 1995 to 3.4 billion units by 2001. High-end smart cards, (which include a processor, not just a memory chip), will boom from 84 million units in 1995 to 1.2 billion units by 2001, the industry analysis firm projects.

Motorola expects to ship cards to select customers by the end of 1997 and initially will target transportation--for contactless cards that transmit data via radio signals for transit fares or highway tolls--and banking.

While Motorola aims at the consumer smart card market, Schlumberger Electronic Transactions will market SafePak as security devices for intranets and the public Internet. It will sell versions for Netscape and Microsoft browsers on Windows, Macintosh, and Unix operating systems.

Its Cryptoflex smart cards feature highly secure, 1024-bit RSA key encryption technology and a choice of smart card readers for desktop computers.

"Corporations are looking for new security technologies to protect valuable database information and communications, among their employees and with their customers," said Jacques Cosnefroy, vice president-general manager of Schlumberger's smart cards unit.

Card readers will plug into the PCMCIA slot on most laptops, serial ports, and keyboards, with other options in the future. Software will let Schlumberger smart cards work with both Microsoft and Netscape security infrastructures.