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Philips Electronics and Sony Corp. Thursday announced a partnership to develop a new ultra short-range radio technology for use in everything from cell phones to peripherals.

The technology is intended to build on each company's existing smartcard line, which allow contactless data sharing, most commonly associated with identity authentication for building access. Operating on 13.56 MHz, the new near field radio-frequency communication technology (NFC) technology would allow the transfer of any kind of data between devices such as mobile phones, digital cameras and PDA's as well as to PC's, laptops, game consoles or PC Peripherals, across a distance of up to twenty centimeters.

While the smartcard market is currently relatively limited, the partnership between the two electronics giants aims to build an open infrastructure of NFC-compliant devices to open up the wide array of potential applications for the technology.

"This agreement will revolutionize the way consumers access services and see the penetration of identification chips move far beyond smart cards, with NFC becoming a standard component of new electronic devices, including those from Philips," said Karsten Ottenberg, general manager of Philips Semiconductors' Identification business.

The companies envision the technology playing a key role in allowing content and service providers to offer various new ways of accessing their services, whereby the consumer's primary NFC device, such as their mobile phone, would act as a smart-key to gain access to chosen services from any NFC device.

"It's a really strong partnership because both companies are very strong in short distance wireless communications," said Ivo Zlatinov, an analyst with Dreifus Associates Ltd. "Between the two of them, they should have most of the pieces they will need."

However, Carl Howe, principal analyst for Forrester Research, notes that Sony's and Philips' big ambitions need time to develop before the impact might be judged.

"The question is can they drive it into enough applications and have the platform developers buy into it as well," said Howe.

While on somewhat different scales, other initiatives aimed at communication between electronic devices, most notably Bluetooth have had limited success.

Near the top among the concerns about wireless communication, of course, is security. Despite ambitious security efforts in Bluetooth, many consumers still fear storing information that potentially could be stolen wirelessly.

"Some people get a feeling that someone might just get access to their credentials while walking by," said Zlatinov. "That's why you need strong security."

Neither company could be reached immediately to discuss plans for security, but it is certain to be a top concern as the companies move forward.

No pricing was available yet for the radio chips, which are expected to be commercial sometime in 2004.