Italy may drop LaserCard's optical stripe from its ID cards

Published 21 November 2006

Analyst report cites expense and incompatibility with European standards as main reasons for possible abandonment; optical stripes are giving way to smartcard technology; if Italy keeps the stripe, deal could mean $50 million in annual revenue for LaserCard

There is trouble on the horizon for Mountain View, California-based LaserCard. Analyst Jeremy Grant of the Stanford Group predicts a one in three chance that the Italian government will drop the company’s optical memory stripe from its national ID card due to high cost and a lack of compatability with the smart card standards likely to become the basis for a Europe-wide identification card. According to Grant, a government commission is reviewing the technology, and although a decision is not expected until January, many believe the stripe should be eliminated. Dropping the stripe, however, would result in delays and require delay the abandonment of a substantial investment. Italy has so far issued about 2 million of the national ID cards, known as the Carta d’Identita Elettronica, or CIE.

Should the optical stripe remain, Grant projects that LaserCard will ultimately earm $40 million to $50 million a year on the Italian ID cards, making it “by far the most important project for LaserCard.” The company is using the same technology for the Saudi Arabian national ID program, but Grant believes optical stripes are a losing technology in the long term. “While its potential market will grow,” Grant writes, “U.S. and international standards that favor microprocessor (smart) cards present an uphill battle to LaserCard’s technology.”

-read more in this Card Technology report