China leads the smart card market in Asia

Frost & Sullivan's latest study on the smart card market reveals that the Asian smart card market will soar to new heights, especially in mainland China .
Written by ZDNet Staff, Contributor
Frost & Sullivan's latest study on the smart card market reveals that the Asian smart card market will soar to new heights, especially in mainland China where the technology is expected to penetrate a slew of applications.

The source of much of this region's growth is the advent of contactless smart card technology.

Nippon Telegraph and Telephone (NTT), for example, has already made major forays into the contactless pre-paid phone card world.

On the global stage, Europe is spearheading the smart card market (including microprocessor and memory cards), accounting for sixty percent of total sales.

Shipment of smart cards across Europe will rise from 794.6 million in 1999 to 2.05 billion in 2006, underpinned by revenues leaping from US$1.2 billion to US$4.2 billion during the same timeframe.

Frost & Sullivan also reveals that the anticipated explosion in mobile Internet usage, along with the arrival of electronic ticketing, will be responsible for continued growth.

The ongoing service enhancements in e-ticketing technology will enable subscribers to produce electronic tickets on major airlines.

Anoop Ubhey, industry analyst at Frost & Sullivan, expects multi-application cards to be a runaway success over the next three years.

"The emergence of Java platforms and Windows for Smart Cards, the programme platform based on the Windows for Smart Cards Operating System, is a real boon for the industry and is redefining the smart card," said Ubhey.

Further market drivers crystallised by Frost & Sullivan's analysis of the smart card industry include the increasing uptake of smart card technology in the leisure industry.

In order to secure competitive advantage, smart card vendors are expanding the spectrum of their offerings and are redefining themselves as providers of "one-stop-shops" for services and software.

The phonecard market was leading the field in terms of applications in 1999, with shipments surpassing 472.0 units. Whilst the European market enters the initial stages of its maturity phase and is therefore beginning to plateau, the Latin American and Asian Pacific markets continue to boom.

Ubhey comments, "In addition to contactless technology being used in the payphone market, Europeans may soon see contactless cards issued by local governments for citizen identification, and trials are underway of contactless e-purse cards. However, contactless cards have so far been relatively slow to take off, with access control and transportation being the only applications to fully commit to them."

The study believes that cost, speed and security factors currently hamper the prospering of contactless smart card technology.

However, costs for contactless smart cards and contactless smart card readers are expected to fall to the same level as contact smart cards over the next two years.

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