DoCoMo To Launch Smart-Card Cash Phones
By Carlo Longino, Wed Jun 16 15:00:00 GMT 2004

NTT DoCoMo said it will begin selling phones in July with Sony's FeliCa contactless smart-card payment technology.

The carrier will launch four handsets next month with the Felica chips inside, which will let users wave the phone near scanners at 9,000 participating shops to make purchases, but can also use them to store an electronic version of their train pass or the ID needed to give them access to an office. Funds can be added to the smart cards right from the handset, over the Internet with a credit card.

In addition to simple payment and identification functions, the phone's smart-card functions can be enhanced and expanded by downloading new i-appli Java applications. At first, 39 providers will offer service through the service, and customers can go to their sites on the handset and download the relevant app to their device. It's quite cool that the functionality can be expanded -- the service already goes beyond single-use smart cards and payment systems like Speedpass, but allowing companies to develop and add their own applications should give it a significant boost in the market. DoCoMo also plans to eventually license the technology to other mobile carriers. The FeliCa system is also much more user-friendly -- and viable -- than other m-payment systems that rely on users to send an SMS or perform a similar action to pay for goods at a retailer's physical location.

The FeliCa functionality can be accessed without opening the phone and running the particular app, but like other smart cards -- and even wallets -- if the handset is lost or stolen, other people can use the stored value. Presumably, some applications require a PIN number or password, and the 3G handsets with the chip can be remotely locked, though the 2G phones seem to lack this ability.

i-mode guru Takeshi Natsuno says the new phones will drastically alter people's lifestyles, in the same way i-mode did five years ago. While that remains to be seen, DoCoMo expects to sell 10 million FeliCa devices in the first 18 months, and sees 60 million users by 2008.