Mobile-phone makers agreed on a new standard for smaller SIM cards, overcoming a deadlock in which Finland's Nokia and Apple had competing proposals.

The so-called "fourth form factor" will be 40 per cent smaller than the current smallest SIM card design, the European Telecommunications Standards Institute said in a statement on its website, following a meeting held May 31 and June 1 in Osaka, Japan. "It can be packaged and distributed in a way that is backwards compatible with existing SIM card designs."

ETSI agreed to pick Apple's SIM card standard, beating a proposal from Nokia, MacWorld said on its website, citing cardmaker Giesecke & Devrient. Spokespersons for ETSI and Nokia couldn't immediately be reached for comment.

In March, a two-day meeting to adopt a format from competing proposals by Apple and Nokia finished without reaching a decision. The smartcards that identify wireless subscribers are standardized to reduce industry costs and give consumers freedom to switch handsets and networks. Smaller versions permit the design of thinner phones.