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Sony Corp. and NTT DoCoMo Inc. said Monday they will jointly develop integrated circuit chip technology that will allow mobile phone users to pay for groceries and train fares using their handsets.

Handsets embedded with smart wallet features of this kind will be available by mid-2004, they said.

By joining hands, Sony, developer of the FeliCa smart card, and NTT DoCoMo, the largest mobile phone operator in Japan, hope to establish de facto standards in the area of electronic money, which is expected to replace cash for many daily transactions.

The announcement is the latest in a growing list of additional features for handsets, which are now being used as Internet browsers, digital cameras, TV tuners and dog translators.

“(The IC chip) has many potential uses, as the capacity of memory chips increases,” Keiji Tachikawa, chief executive of NTT DoCoMo, told Monday’s news conference. “I think it will even be able to contain passport data in the future.”

The firms will set up a joint venture, dubbed FeliCa Networks Inc., in January. The venture will be capitalized at 6 billion yen, with Sony taking a 60 percent stake and DoCoMo the remainder.

The new company will develop the IC chip technology on the basis of the FeliCa smart cards. It will license the technology out to third-party businesses, such as public transportation operators, retailers and event organizers.

In this fashion, mobile phone users will be able to use their handsets as commuter passes, wallets and concert tickets.

NTT DoCoMo said it hopes to launch a test service for mobile phones equipped with the IC chip in December and to offer FOMA and second-generation handsets designed to these specifications by mid-2004.

All NTT DoCoMo’s handsets will eventually be equipped with the IC chip, the officials said, adding the firm may install the same features in handsets sold overseas in the future.

Sony developed the FeliCa cards in 1988. The system is described as being “contactless” as users do not have to pull out their cards from their wallets when they place them on card readers.

The system has since been used by convenience stores and transportation systems both in Japan and overseas.

The cards have been adopted by East Japan Railway Co., whose Suica system was launched two years ago.

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