Smarty, the diskette-like device that enables personal computers to read smart cards, has gotten a boost from a worldwide distribution agreement with Gemplus.

SmartDisk Corp., the Japanese-American joint venture that promotes Smarty, sees its 3.5-inch, floppy-shaped vehicle as a step toward the full- scale integration of card readers with PCs and keyboards.

"We're relying on Gemplus to take us into the marketplace," said Quresh Sachee, vice president of marketing for SmartDisk, of Naples, Fla. "Gemplus will represent us worldwide, but our goal was to tap into smart card markets in Europe, and Gemplus is right in the middle of that."

Gemplus, of France, is the leading chip card manufacturer, and analysts say its endorsement of Smarty is significant.

"A big name like Gemplus wholeheartedly agreeing to distribute (Smarty) through the channels in which it takes great pride in a sense legitimizes the product," said Erik Bowman an analyst at Cardtech/Securtech in Bethesda, Md.

SmartDisk was formed nearly a year ago by Smarty owner Fischer International Systems Corp. and Toshiba Corp. of Japan. Additional investors are expected in a few months.

SmartDisk officials said Gemplus, which calls itself a "complete solutions" company, can use Smarty to round out its hardware line. It could help to jump-start the electronic commerce and information security markets that Gemplus is approaching through Gemsafe, which International Business Machines Corp. has adopted. (See article below.)

Smarty is certified for the Mondex electronic cash system and has been tested by Visa and some of its member banks. SmartDisk said other partnerships will be announced soon.

Jacques Seneca, executive vice president of marketing and technology for Gemplus, said distributing Smarty "furthers Gemplus' goals to advance the usability of smart cards and continues to bring value to our customers."

Until now, SmartDisk's largest outlet has been Visa International, which has shipped more than 250,000 units of Smarty and a sister product, FlashPath, to platinum-card customers in Latin America. Cardholders can insert their cards through Smarty and into their computers to reach a special Web site.

SmartDisk is working to go beyond floppy-disk drives, developing products for Zip and Super drives, Mr. Sachee said. But officials say they have also had to adjust to the smart card market's changing winds.

"Two years ago the supposed killer application was home banking or stored value," said Paul Pieske, director of product marketing. "Now the value proposition with stored value isn't great enough to promote widespread adoption of this technology. We're trying to keep the feelers out for where the potential is and where the pilots are."

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