Eindhoven, The Netherlands, April 27, 2004 – Royal Philips Electronics (NYSE: PHG, AEX: PHI) today announced that the world leading MIFARE contactless interface technology has been selected by ERG Group to establish a regional smart card-based mass transit fare collection and settlement system in Seattle, Washington. The fare system based on MIFARE chip technology will enhance the reliability, security, efficiency and convenience of public transportation covering seven of the greater Seattle, Washington transit systems in the Central Puget Sound region. The project is known as the Central Puget Sound Regional Fare Coordination (RFC) Project.

The Puget Sound area joins the expanding list of North American urban regions adopting contactless smart card technology to better coordinate and enhance transit services. The Seattle system covers both land- and ferry-based transportation applications, representing approximately 130 million passenger journeys per year. ERG anticipates that 400,000 smart cards will be initially issued for this regional system.

"We're positioning ourselves to grow with this technology and see other service providers joining our system in the future," said Joni Earl, Chief Executive Officer of Sound Transit and Chairperson of the Regional Project Joint Board. "As contactless smart cards become more widely used, there may be an opportunity for cardholders to pay for other services, such as parking, sundries or other municipal services. Eventually, the contactless microchip with the transit information may be made even more convenient by embedding it in watches, key chains or other easily carried items for the convenience of the user."

The new project involves seven transit agencies in the Seattle area with the ERG Group acting as the overall system integrator. Through the close collaboration between Philips and ERG Group, ERG is using the advanced and proven MIFARE chip technology for the contactless smart card scheme in the Puget Sound. ERG has been successfully using cards based on this technology in many applications in Europe and Asia and is ready to implement similar fare systems in the North American market.

For this project the latest generation of cost-effective, secure, high speed technology for contactless smart cards and corresponding reader devices will be used, such as the MIFARE DESFire chip for standard transit cards and the ultra low cost MIFARE UltraLight chip for disposable cards. Fully in line with ISO 14443A, the standard for contactless smart cards, the MIFARE chip technology was first developed in early 1990's and was one of the early, readily available and highly accepted contactless smart card and reader chips suitable for use in public transport.

"Regional fare collection is now becoming established in the US," said Mike Nash, general manager of ERG's American operations. "The tremendous value and benefits of region-wide smart card based fare collection have been proven around the world in systems developed by ERG. We're gratified that forward-thinking transit officials are committed to bringing those same benefits to their regions."

"Because of its cost efficiency and high-performance features, the MIFARE technology has once again been chosen to power a regional transportation fare collection system," said Jan-Willem Reynaerts, general manager for transport and logistics at Philips Semiconductors. "Residents and visitors to the Seattle area will greatly benefit from increased efficiency and convenience in public transport, and Seattle will serve as an example to other parts of North America of the exciting possibilities that smart card technology can bring to the urban infrastructure."

The disposable fare cards for use in the Seattle system are targeted at the card collector, tourism, and human service programs. The disposable cards will have specialized graphics and be pre-valued with a set amount of money (eg., $20), a set number of rides (e.g., 10), or a set period of time (e.g., 7 days after first use). The disposable fare card from ERG will be based on the MIFARE UltraLight card platform, an application specific integrated circuit (ASIC) that has been specifically designed for low cost contactless cards in transit environments. The UltraLight chip-based card represents a new range of low cost contactless disposable cards and complies with the ISO 14443 A standard and operates on the same terminal as the MIFARE product portfolio such as MIFARE DESFire, MIFARE Classic and MIFARE dual interface ICs.

More information on MIFARE can be obtained from Philips at http://www.semiconductors.philips.com/markets/identification/ or by visiting www.mifare.net.