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PRINCETON, N.J. -- The smart card market will grow rapidly over the next five years throughout the Americas, according to new research by Frost & Sullivan and the Smart Card Alliance.
North American smart card microcontroller shipments will top 132 million units in 2005 and grow at a rapid 27.7 percent compound annual rate through 2010. In Latin America, growth will be even more spectacular. Frost & Sullivan forecasts a 59.1 percent compound annual growth rate for shipments during the same period. Shipments in the region were 136.4 million microcontroller smart cards in 2005.
The new report, "Americas Smart Card Market Analysis," came as a result of a project to estimate the market in the Americas undertaken by the Smart Card Alliance in collaboration with growth consulting company Frost & Sullivan.
"It’s an exciting time to be in the smart card market anywhere in the Americas," said Randy Vanderhoof, executive director of the Smart Card Alliance. "Things are happening fast, and we felt it was important to provide a baseline to chart our progress. With our members’ help, Frost & Sullivan was able to evaluate the markets for microcontroller smart cards by market segment in both North and Latin America and give us a clear picture of where we stand today, and where we are going."
U.S./Canadian Market Trends
The SIM mobile telecommunications market was the largest U.S. market segment in 2004, followed by pay TV, payment/loyalty, government/ID and access control. Frost & Sullivan expects the SIM card share of total market to drop dramatically over the next five years as other applications become more widely deployed. The fastest growing sectors will be payment and government/ID.
Interest in contactless payment will drive U.S. payment market growth and the migration to EMV will be a factor in Canada. HSPD-12 is a key driver for the government and ID market. The deployment of FIPS 201-compliant ID applications within federal agencies, as well as the U.S. e-passport project, will be the primary engines for growth in this market. Enterprise access control applications in the forecast period will feature a marked convergence between physical and logical access control. This, in turn, is driving organizations to adopt smart-card-based ID badges that combine physical and logical access.
Latin American Market Trends
The GSM mobile telecommunications market was the largest smart card market in Latin America in 2004. Payment/loyalty accounted for virtually all of the rest of the market. According to Frost & Sullivan, these two applications will continue to lead shipments in the region. Over the next five years, growth in SIM card shipments will be the main driver. Replacement of older handsets and networks with newer technology, along with penetration of new subscribers using prepaid SIM card options will keep shipments growing rapidly. In payment/loyalty, the migration of the financial industry to EMV in Brazil and Mexico will fuel growth at a steady rate in the short and medium term. Additional countries have also begun pilot projects for chip-based banking and payment cards and are expected to contribute to growth.
"Both the North and the Latin American smart card markets are currently on the verge of high growth for numerous applications," said Prianka Chopra, industry manager – Smart Cards, for Frost & Sullivan. "As a result, smart card technology will play a more significant role in the day-to-day affairs of end-users in these regions."
An executive summary of the report is available at no charge at www.smartcardalliance.org. The complete report, F602-33: "Americas Smart Card Market Analysis," is available from Frost & Sullivan at www.frost.com. It provides market size estimates through 2010 for both shipments and revenue by market sector, along with an analysis of key market trends and drivers. Smart Card Alliance members can purchase the report at a discount. For more information, visit www.frost.com or call James Politis, Frost & Sullivan at [email protected] or at (210) 247-3875.
The Smart Card Alliance will hold its 13th Fall Annual Conference at the Miami Marriott Biscayne Bay, Oct.11-14, 2005, expanded this year to include Latin America. The conference is open to all organizations and individuals. The agenda, event pricing and online registration can be found on the Alliance Web site, www.smartcardalliance.org.