Philips Semiconductors announced a cooperation agreement with the French card manufacturer Gemplus to develop "smart labels" based on chip technology.

Designed for such functions as inventory tracking, data entry, and counterfeit protection, the systems rely on the same radio-frequency identification devices as contactless smart cards, such as those used for mass transit and highway toll collections. Gemplus formed a business unit, Gemplus Tag, aiming to cut into the market-share dominance of bar coding.

Gemplus said it will develop reader/writer units for Philips' I-Code technology "because of its excellent response to the requirements of different players in retail distribution," said Gemplus Tag manager Frederic Coustere.

Philips announced a separate agreement with Texas Instruments to support a standard for radio-frequency smart labels.

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