Frost & Sullivan: The three-headed monster of the smart card industry
The smart card industry is dominated by three major players — Gemalto, Oberthur and Giesecke & Devrient (G&D)— with each jockeying for peak position to capture the market.
A recent report from Frost & Sullivan reveals the current state of the market and the moves being made by its top competitors.
Gemalto, who is widely considered to be top dog at present, has reaffirmed its dominance by reporting higher than expected first-quarter sales. The jump in sales figures spans all of Gemalto’s business sectors — mobile, payment, security — and expects double-digit profit growth in 2013.
Sources at Gemalto expect that high end SIMs for LTE and NFC features will be the reason for the intense revenue growth, but also cite the further development of mobile payments and EMV migration as important factors for 2013. From a regional perspective, the Asia Pacific region and the United States will propel the projected sales growth.
Oberthur currently holds the second spot in the smart card market hierarchy, according to market share, but has revealed a 3-year strategic plan that it hopes will shuffle the standings and boost revenue from services and software from 28% to 40% of the total. It is a similar strategy to competitor Gemalto, as Oberthur is also keen to cash in on the impending explosion of LTE and NFC technologies.
Approaching things from a different angle is Giesecke & Devrient (G&D), who last week announced 400 job cuts in its European mobile security unit — 125 of which were at the company’s Munich headquarters. High-level price competition greatly impacted the SIM market, but that impact has now spread to the payment card sector as well.
The competitive nature of the market has levied substantial pressure on G&D’s business units, a move that has forced the company’s hand. G&D appears to be optimizing investments and minimizing the attached risk, preparing for the next wave of smart card competition by resizing its teams and streamlining company methodology.
It is evident that each of the smart card industry’s three primary players are jockeying for market dominance, but as is often the case, price will be the key element of success.