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Smart Card Market Focusing On Services To Sustain Growth, Finds Frost & Sullivan

LONDON, April 11, 2013 /PRNewswire/ -- Smart card vendors continue to move from provisioning of physical cards to the delivery of smart card-related software and services. The commoditisation of physical smart cards and the progressive digitalisation of services have forced smart card vendors to re-think their strategies and focus on the services side of their business.

New analysis from Frost & Sullivan ( http://www.smartcards.frost.com), Global Smart Card Forecaster – Core Industry Shipment/ Revenue Outlook, finds that the smart card market covering SIM, banking, government and transportation verticals across Asia-Pacific, Africa, the Middle East, Europe, Latin America and North America, earned approximately $6,907.2 million in 2012. The market revenue is estimated to reach $9,551.6 million in 2018. Unit shipments are anticipated to expand from 7,119.8 million to 10,906.8 million units over the same time period.

The hitherto dominant SIM card market is approaching maturity. With both unit shipment and revenue growth rates expected to will slow, focusing on the high-end SIM cards segment can protect smart card vendors from intense price competition of the mid-range and low-end SIM card segments in the short-term. However, price competition will, at some point, affect the high-end segments as well.

"It is advisable, therefore, for smart card vendors to evaluate providing SIM-related services and solutions in the field of mobile payments and device management," noted Frost & Sullivan's ICT Global Program Director Jean-Noël Georges. "Smart card vendors should also consider engaging in M&A activity to build economies of scale, and thus, withstand the slow growth of the SIM card market and its decreasing revenue potential."

Embedded SIMs for mobile communications could start being commercialised within the forecast period. The shift from physical SIM cards to embedded SIMs will be largely driven by smartphone manufacturers.

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