SCM Microsystems to focus on contactless market

SCM Microsystems (SCM) says it plans to focus on the fast growing contactless technology market, an important extension to their current strategy. Last week the company announced its first major contactless initiative - a Memorandum of Understanding with Sony Corporation to supply contactless FeliCa physical access control terminals for international markets.

SCM will also develop technology to support NFC in its readers and terminals, including its FeliCa products. NFC is designed to support existing contactless payment standards, so that contactless infrastructures being installed today will work with NFC-enabled mobile phones in the future. SCM announced its first NFC-enabled product, a USB dongle for m-payment applications, in Q2 2008.

“The use of contactless technology is expanding rapidly across several sectors and regions, creating significant new demand for contactless reader and terminal solutions,” says Felix Marx, CEO, SCM Microsystems. “Targeting contactless technology plays on SCM's strengths and expands the potential market we can reach.”

The Sony announcement is a good example of how significant the contactless opportunity is for SCM. Japan is the most developed contactless market in the world, with more than 250m electronic payment cards and FeliCa-enabled mobile phones in circulation today. There is a large and growing demand for readers and payment terminals that work with the FeliCa de facto standard.

“NFC is one contactless technology with the potential to satisfy the broad-based requirements for connectivity between devices as new networking continues to reshape a broad range of consumer and business transactions and communications,” comments Louis Bianchin, senior analyst and program manager, RFID, Venture Development Corporation. “This market, while embryonic today, should be around $1bn by 2012, and should benefit from the supply of contactless readers and terminals solutions integrating ISO 14443, FeliCa and fully supporting NFC functionality.”

SCM plans to address the market by creating a broad range of readers and terminals that support the different contactless standards demanded by customers. In some cases, SCM will also combine multiple standards into a single device to make it more universally useful and solve compatibility or conflicting standards issues between vendors or regions.

“The timing for entering the contactless market is optimum for SCM, because the standards are now well defined and many programs are now underway. The focus is moving toward growing the acceptance base, which always creates demand for a variety of different devices very similar to those SCM has traditionally manufactured,” continues Marx. “We are extremely well positioned to play a significant role in this emerging market, with a broad range of contactless solutions already deployed worldwide and a highly experienced team with extensive know-how in contactless technology.”

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