Playing their cards right 

 TECHNOLOGY: CardLogix in Irvine is hoping to take advantage of the growing popularity and usefulness of 'smart' plastic.  

August 3, 2000

 

By CHRISTOPHER C. WARREN
The Orange County Register
From Irvine  

 

   When the delegates at the Democratic National Convention convene in Los Angeles next month, they'll be getting a firsthand look at the smart-card technology developed by CardLogix.

Voter.com picked Irvine-based CardLogix to provide the smart cards that will serve as identification cards powering the 90 interactive kiosks that the voter Web site is placing in and around the convention Aug. 14-18.

Douglas Smith, a Voter.com spokesman in Washington, D.C., said 10,000 of the CardLogix cards will be issued to delegates and convention-goers who will be able to use them at the kiosks in the convention center and around Los Angeles. Voter.com is providing Internet access to all delegates, members of the press and convention participants, Smith said.

It's a high-profile gig for Card Logix, a 6-year-old company trying to bring high technology to your wallet. Smart cards are like bank cards on steroids where piles of data are stored on chips vs. the brief data held on a typical plastic card's magnetic strip. The added computing power adds either more security, beefier functions - or both. It's a fledgling business, according to Dataquest, a computer-industry research firm, that could grow to worldwide sales of $6.8 billion by 2002.

"Smart cards are an integral part of the Internet economy," said Bruce Ross, CardLogix vice president of marketing.

Dan Balaban, managing editor for Chicago-based Card Technology magazine, doubts that CardLogix's deal with Voter.com will have much of an effect on the smart-card industry. "It's not going to be garner much publicity outside of the convention hall," he said.

But there are some pretty big smart-card projects happening in the United States, Balaban said.

The U.S. Department of Defense is replacing all its military and civilian personnel identification cards with smart cards, he said. And the smart-card-powered American Express Blue Card is generating a lot of interest.

Still, smart cards are only beginning to gain a toehold in this country. Card Technology estimated that in 1999 about 1.5 billion smart cards were issued worldwide, but only 20 million of them were issued in the United States, "and most of those," Balaban said, "were prepaid phone cards.''

Litronic Inc. Vice President Bob Gray is more optimistic. The Irvine-based maker of smart-card readers is in the process of designing its own smart card.

Only about 2 percent of this country's new personal computers are now equipped with smart-card readers, Gray said.

"Within the next couple of years," Gray predicted, "smart cards will be a lot more popular in this country."

Smart cards may fit many business niches, as CardLogix's product line shows.

Its Health Data Card allows access to patient histories that are critical to emergency care and may hold larger files with more extensive data drawn from remote medical networks.

The Casino Magic Card is a cashless gaming casino smart card that works like electronic money for gambling or as a customer-retention tool at hotels, doling out benefits like additional slot-machine pulls, free drinks and complimentary rooms.

And last March, CardLogix announced that AOL MovieFone, the nation's largest movie-listing guide and ticketing service, was adopting the Card Logix system for cutting-edge movie ticketing.

"I'd be willing to bet that most of the (Democratic convention) delegates haven't heard of smart cards,'' Voter.com's Smith said, "but this is going to allow them to have unbelievable access to information.''

Kiosks and smart cards are part of Voter.com's Internet-based system that includes live convention Webcasts, news reporting and chat rooms for voter comments.

As they meander through the convention site and vicinity, delegates and convention-goers will be able to receive updated information and real-time access to multiple, simultaneous events and news, Smith said.

Through CardLogix gear, conventioneers get personalized information such as convention schedules, issue updates, status on party platform votes, and home-district data for each delegate.

Smith first learned about the cards from his girlfriend, who told him the computer chip-equipped cards were replacing dog tags in the U.S. military. "I did some research,'' Smith said, "and found Card Logix there in Irvine."

Founded in 1994, privately owned CardLogix is now getting to the point where, according to Ross, an initial public offering may come within the next 12 months.

Until the company does go public, Ross said, the company won't say how much money it's making.

Still, business is bustling. CardLogix operates from a 4,000-square-foot facility with a staff of 15. In addition to memory and microprocessor smart cards, the firm also provides hardware and software development tools.

Earlier this year, the firm purchased a German-made smart-card manufacturing system that can produce up to 10 million cards a year. A single person can man the machine, Ross said, which is precisely what the founders had in mind when CardLogix was started. "'We wanted a company that made a lot of stuff with a small staff.''