smart card opportunities in asia

Asia OpportunitiesAsia OpportunitiesSmart Card Opportunities in AsiaSmart Card Opportunities in Asia

Damien See, Senior Industry Analyst

Information & Communication Technology

15 November 201115 November 2011

Today’s Presenter

Damien See, Senior Industry Analyst

Frost & Sullivan

2

• 10 years of professional experience spanning a range that includes technical

project management and implementation of RND engineering assignments to

ICT-based product planning and development

Focus Points

• Smart Cards in Asia – An Overview

• Asian Smart Cards: Drivers & Restraints

• Asian Opportunities, Identified

• The Future of Smart Cards in Asia

3

Poll Question

Do you think Asia will dominate the smart card industry in 2020 in terms of revenue?

YES

4

YES

NO

Decline to answer

Smart Cards in Asia

• The smart cards industry in Asia affects a wide range of the

consumers in the ecosystem

• From the smart card manufacturers themselves, to banking

institutions, to the credit card companies, to the solution

providers, and ultimately to the end customers – the smart card is

key in today’s modern world

5

• Properly implemented, smart cards in all sectors has proven very

effective in combating theft and fraud

• Clients who are interested in what 2020 has to offer for this

region will find this analyst briefing especially relevant

Present Current and Future Key Trends

Current:

1. Disparity in standardization

2. Many participants & players

3. Little cooperation and specialization

6

Future:

1. Streamlined standards

2. Oligopoly-type environment

3. Convergence & specializations

Smart Cards in Asia: An Overview

Asia Smart Cards: Drivers & Restraints

Asian Opportunities, Identified

The future of Smart Cards in Asia


7

The future of Smart Cards in Asia

Smart Cards in Asia: An Overview (continue)

Units

millionsGrowth

Revenue

US$

millions

Growth

2009 2584 - 2286 -

2010 3065 18.6% 2612 14.3%

2011 3354 9.4% 2725 4.3%

Smart Card Market: Unit Shipment and Revenues

(APAC), 2009-2017

8

2011 3354 9.4% 2725 4.3%

2012 3645 8.7% 2862 5.0%

2013 3984 9.3% 3008 5.1%

2014 4372 9.7% 3191 6.1%

2015 4820 10.2% 3404 6.7%

2016 5347 10.9% 3642 7.0%

2017 5916 10.6% 3894 6.9%

CAGR

(2010-2017) 9.8% 5.9%

Note: All figures are rounded; the base year is 2010.

Source: Frost & Sullivan


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Note: All figures are rounded; the base year is 2010. Source: Frost & Sullivan analysis.


10

Note: All figures are rounded; the base year is 2010. Source: Frost & Sullivan analysis.


GOVERNMENT & ID market

6%

TRANSPORTATION market

4%

PAY TV market1% CORPORATE

SECURITY market1%

OTHERS market2%

SC breakdown in APAC for 2011

11

SIM market78%

BANKING & PAYMENT market

8%




The Future of Smart Cards in Asia


12


Asia Smart Cards: Drivers & Restraints (continue)M

ark

et

Dri

vers

1-2 years 3-5 years 6-10 years

Government Projects drives demand for smartcard

usage within many sectors, notably national ID

Security Concerns, particularly within the

public sphere will drive demand for smart

cards

Transportation & Urbanization drives demand for

more effective methods to manage commuters

Smart Card Market: Key Market Drivers (APAC), 2010-2017

13

Mark

et

Dri

vers

cards

Growth of smartphones necessitates

the adoption of high-capacity SIM

Source: Frost & Sullivan analysis.

Impact: High Medium Low

Asia Smart Cards: Drivers & Restraints (continue)M

ark

et

Restr

ain

ts

Alternative and Existing Infrastructure such

as magnetic stripes slows the pace of

development

Privacy Concerns over the amount of

information that can be tracked by the

government and merchants raises concerns

1-2 years 3-5 years 6-10 years

Smart Card Market: Key Market Restraints (APAC), 2010-2017

14

Mark

et

Restr

ain

ts

Lack of Clarity on an Appropriate Business Model especially within NFC and even M2M segment may

hinder growth

development

Impact: High Medium Low

Source: Frost & Sullivan analysis.




The future of smart Cards in Asia


15

The future of smart Cards in Asia

Asian Opportunities, Identified (continue)

12.94

31.35

61.21

111.19

20

40

60

80

100

120

140

NFC Payment: Transaction Value Estimation (World), 2011-2015

NFC

16

3.8412.94

0

20

2011 2012 2013 2014 2015

World (in € billions) Expon. (World (in € billions))

NFC Applications

Contactless Payment

Discount Coupons

Niche Advertisements

Asian Opportunities, Identified (continue)

M2M

17

India

Japan & South Korea

• In Japan, Mobile Suica is actively used in their transit system (NFC)

•South Korea HomePlus deployed solution allowing public transport passengers to purchase groceries while waiting for trains through mobile phones

China

•2.5 million SIMpass (NFC-bridge solutions) has been delivered in China by Watchdata

•With over 1.3 billion population, and 68% mobile penetration –China has a “ready”

Some Interesting Insights of ASIA

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India

• Similar to China, India also has a huge population with ready access to SIM

•India is actually growing faster than China in mobile phone usage

market in SIM

Indonesia & Philippines

•Mobile branchless (pilot) banking projects

•Mobile phone are used for banking transactions





The Future of smart cards in Asia

19


The Future of Smart Cards in Asia (continued)

Pay as You Drive

Car Sharing Apps Store

20

New Business Models made possible with smart cards as the enablers and

secure elements

The Future of Smart Cards in Asia (continued)

Phone Broadband Pay TV Mobile & Content

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Many operators in APAC are moving towards bundling their

services to increase customer retention and increasing their

revenues by efficiently utilizing their infrastructure.

Content

Convergence is the KEY!

• Highly fragmented market to be unified

either by consolidation or partnerships

• Integration of siloed systems in a workflow

Market

TrendsConvergence

Consolidation

& Partnerships

Peak activity between

now and 2015

• Blurring the lines for service providers, content

creators and device makers

• Need to make applications and content available to

customers anytime, anywhere, any device – on

demand!

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• Asia Pacific growing rapidly

• Still evolving in terms of adoption of next

generation services and products and hence

present a growing opportunity

• Services present great revenue potential

• System Integration is emerging as a key driver in the market

Emerging

Markets

Increasing

role of

Professional

Services

Peak activity 2012 to

2017

Peak activity

2015 to 2020

Sm

art

Ca

rd i

s

the

EN

AB

LE

R!

Key Take-Aways

• Convergence

• Asia Pacific presents a growing opportunity for smart card

players

• Services to present the greatest potential revenue stream

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• System integrations is a key driver

• Consolidations and partnerships across many verticals

Next Steps

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For Additional Information

Joanna Lewandowska

Corporate Communications Manager

ICT

+48 (0) 22 390 41 46

[email protected]

Gustavo Cury

Sales Manager

ICT

+44 (0)20 7343 8310

[email protected]

27

Damien See

Senior Industry Analyst

ICT

+ 60 3 6207 1018

[email protected]

Jean-Noël Georges

Global Program Director

ICT

+33 (0) 4 93 00 61 87

[email protected]

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