Universal Music France Working with Philips and Visa International to Demonstrate Exciting New Applications

Las Vegas, Nevada, January 8, 2004–Royal Philips Electronics (AEX: PHI, NYSE: PHG) and Visa International have joined forces to show how the latest contactless technology can change the way digital content and services are distributed, paid for and accessed by today’s universally connected consumer.

Following the announcement of an alliance between the two companies in May last year, Philips and Visa International have been exploring the market by proposing demos and concepts across different industries–including communications, consumer electronics, computing and digital content providers. The two organizations are showcasing proofs of concept at the Consumer Electronics Show (CES) in Las Vegas that demonstrate the power of breakthrough technologies, such as Philips’ Near Field Communication (NFC) technology and Visa’s Verified by Visa, an authentication service based on the industry standard 3-D Secure, which enables Visa cardholders to safely shop online using a unique password. They show how value-add platforms can deliver rich and varied content in innovative ways.

“Each of Visa’s regions evolves differently reflecting unique local operating environments and market demands. Visa International is fully committed to providing secure payment options that are tailored to the changing needs of our member financial institutions, merchants and the evolving lifestyles of their customers,” said Gaylon Howe, executive vice president, Consumer Product Platforms, Visa International. “Both Visa International and Philips share a vision of secure universal commerce and connectivity, whereby consumers can access and pay for physical and digital services anywhere, at any time, using any device.”

“As we move into the roll-out phase of NFC technology, we are proud to present showcases which represent the first step in providing people with secure access to attractive content using their mobile devices as the central element,” said Scott McGregor, president and chief executive officer, Philips Semiconductors. “It is also a great example of how three major players with complementary capabilities can collaborate to bring a vision to life and new services to the market.”

The two organizations are showcasing proofs of concept at CES, highlighting the unique value derived from combining the latest consumer electronics, wireless connectivity and secure, universal payment. In one scenario, music lovers can download the right to listen to a song to their PDA or their Visa payment card either by holding the PDA near a smart poster of their favorite Universal Music pop star or by holding their contactless Visa card near a store kiosk selling songs. The smart poster contains an embedded microchip that sends the information to the PDA using Philips’ Near Field Communications (NFC) technology. Payment is easy and secure using the Verified by Visa solution and the song rights can be stored utilizing Visa Smart Secure Storage (VS3). The kiosk is enabled with RFID technology to capture payment information from the card and transfer the rights to be stored in VS3. In both cases to hear the song, the user simply transfers the song rights to a Philips Streamium Internet radio using NFC, and the song is then played over the Internet. Other scenarios demonstrate ticketing and travel applications.

Among the partners working with Philips and Visa International is global entertainment company Universal Music France. “Universal Music France is delighted to work with Philips and Visa as they both share our belief that content should be securely and easily available in any form–physical or digital–to anybody, in any environment using a flexible pricing plan. The ability for users of Universal Music France’s E-Compil music portal to access multi-rich services through any channel on any device is central to our vision for the future of the entertainment industry,” said Pascal Nègre, President of Universal Music France.

Having demonstrated the technical concept of these applications, Philips and Visa International will continue to assess market demand, and develop stakeholder business cases that reflect the deployment opportunities and challenges within various global markets.

Philips will be showcasing the proofs of concept at the 2004 International Consumer Electronics Show in Las Vegas (January 8-11, 2004). In addition to the demo mentioned earlier, the animated proofs of concepts presented at the show are as follows:

• Ticketing: Mobile phone users can pay for concert or movie tickets at the box office simply by holding their phone next to the payment terminal. The contactless chip in the phone transfers Visa payment data to the terminal and, once payment is confirmed, sends the tickets back to the phone. The phone user can then transfer a ticket using NFC to a friend’s mobile phone. Payment is made by a new Visa person-to-person payment concept. Once at the venue, both ticket holders can use their phones to gain access and may also receive an electronic discount coupon for an on-site merchant.

• Travel: Travelers can book and pay for airline tickets and hotel rooms using their home PC, an NFC enabled mouse and a contactless Visa payment card. The tickets and airline information are transferred from the PC to the Visa card using NFC and stored on the card’s chip using Visa Smart Secure Storage. The card is then used for airline check-in, to board the flight and to check-in at the hotel. The hotel room key can be transferred to the traveler’s mobile phone using NFC and the phone can then be used to access the room. On departure, the hotel can transfer a receipt to the phone and, once at home, the traveler can transfer the receipt from the phone to a PC for expense reporting – all made possible by NFC.

About Near Field Communications (NFC)

Near Field Communication (NFC)–standardized in ISO 18092–is an interface technology for exchanging data between consumer electronic devices, like PCs and mobile phones, at a distance of typically 10 centimeters. It operates in the 13.56MHz frequency range. As NFC-compliant devices are brought close together they detect the other device and begin to determine how they can interact in terms of transferring data. For example, bringing a NFC-enabled camera close to a TV fitted with the same technology could initiate a transfer of images, while a PDA and a computer will know how to synchronize address books or a mobile phone and a MP3 player will be able to initiate the transfer of music files. Using NFC, consumers can quickly establish wireless links between devices. It provides a more natural method for connecting and interacting with devices, broadening the scope of networking applications.

About Verified by Visa

Verified by Visa is Visa’s payment authentication service that gives online customers an even more secure online shopping experience. Verified by Visa gives online cardholders more control over when and where their cards are used; reduces the potential for unauthorized use on the Internet; and increases consumer confidence in online shopping. With Verified by Visa, cardholder identity is confirmed with the use of a personalized password during the checkout process. In a matter of seconds, a cardholder’s bank validates the password, thus deterring unauthorized use. Verified by Visa, together with Visa’s global Account Information Security program, serve as cornerstone programs to make the Internet secure for shoppers and merchants.

About Royal Philips Electronics

Royal Philips Electronics of the Netherlands is one of the world’s biggest electronics companies and Europe’s largest, with sales of EUR 31.8 billion in 2002. It is a global leader in color television sets, lighting, electric shavers, medical diagnostic imaging and patient monitoring, and one-chip TV products. Its 166,500 employees in more than 60 countries are active in the areas of lighting, consumer electronics, domestic appliances, semiconductors, and medical systems. Philips is quoted on the NYSE (symbol: PHG), Frankfurt, Amsterdam and other stock exchanges. News from Philips is located at http://www.semiconductors.philips.com.

About Visa

Visa is the world’s leading payment brand generating US$2.7 trillion in annual card sales volume. Visa has unsurpassed acceptance in more than 150 countries. The Visa organization plays a pivotal role in developing innovative payment products and technologies to benefit its 21,000 member financial institutions and their cardholders. Visa is a leader in Internet based payments and is pioneering the creation of u-commerce, or universal commerce-the ability to conduct commerce anywhere, anytime, and any way. For more information, visit http://www.corporate.visa.com.