A smart card is also known as a chip card, or integrated circuit card (ICC). Usually a plastic card which contains a memory or microprocessor chip embedded in it, which is capable of storing and transmitting data. A smart card is small and may be used for security, authentication, identification, data storage and application processing. The smart card contains embedded integrated circuits which make them different from other cards which may just be plastic or polycarbonate.
Smart cards market can be classified based on the basis of the interface into contact smart cards, contactless smart cards, and hybrid smart cards. Based on its components, there are two types – memory smart cards and microprocessors. Smart cards have a wide area of application such as in transportation, telecommunication, for making government IDs, in the financial sector and in paid TV services. In addition to these, geographically the market is divided into North America, EMEA, Asia-Pacific, and Rest of the world.
According to Transparency Market Research, the global smart card market was valued at USD 4.5 billion in 2011 and is expected to grow at a CAGR of 7.7%. The market is expected to reach USD 7.9 billion by 2018. The telecommunication sector is the largest revenue generator for the smart card market, contributing about 50% of the revenue. Geographically, EMEA is the largest revenue generator for the smart cards market on account of technology competence and demand for secured transactions.
According to a new market research report, ‘World Smart Card- Advanced Technologies, Application and Global Forecast (2008 – 2015)’, published by MarketsandMarkets (www.marketsandmarkets.com), the total global smart card market is expected to be worth US$6.6 billion by 2015, out of which the Telecommunication sector will account for nearly 53.8% of the total revenues. The global market is expected to record a CAGR of 7.3% from 2009 to 2014.
The bcc Market Research reports that,
- In 2011, 6.2 billion smart cards were shipped. It is estimated that smart card shipments are forecast to reach 6.8 billion in 2012 and 11.1 billion in 2017, increasing at a compound annual growth rate (CAGR) of 10.3% from 2012 to 2017.
- In dollar figures, the smart card market was at $4.7 billion in 2011. It is expected to reach nearly $5.1 billion in 2012 and $7.3 billion in 2017, at a CAGR of 7.4%.
- The telecommunications segment shipped 4.7 billion smart cards in 2011. This figure is estimated to reach 5.1 billion in 2012 and 8 billion units by 2017, at a five-year CAGR of 9.6%.
The major driver for the smart card market is its application in the financial sector with the increased global demand for credit cards. Also, rising cases of fraudulent transactions have reduced the use of the magnetic strip for encoding data. Thus, it is expected that microprocessor based smart cards will continue to dominate the smart card shipments, as compared to the memory chip based smart cards. The microprocessor segment has accounted for shipments of 4.5 billion smart cards in 2009, which was 86.5% of the overall shipments (5.2 billion) of smart cards. The report provides extensive analysis of the smart card industry, current market trends, industry drivers and challenges for better understanding of the smart card market structure.
Growing mobile penetration, surge in acceptance from various governments and increased security and reliability has spurred the growth of smart card shipments, which reached 5.2 billion in 2009. Advent of new form factors such as Near Field Communications (NFC) and Machine-to-Machine (M2M) communication, growing government ID projects across the globe and EMV compliance will support the growth of smart cards for next five years, resulting into 8.8 billion smart cards shipment by the end of 2015. The enhanced security feature that a smart card offers is a driving force in the development of the market with regards to the financial sector and this is expected to grow with time.
The smart card market revenue is expected to grow from $4,498.9 million in 2009 to reach $6,600 million in 2015 with a CAGR of 7.3% from 2010 to 2015. EMEA region holds the maximum share of revenue in consumer electronics market on account of technological competence, high adoption of high end smart cards and growing need of secure transaction and identity and access control. The Asian region, especially, India and China have emerged as smart card hotspots with continuous development of the cellular markets and the increasing 3G penetration and increased governmental interest across the region.
Some of the key players dominating the smart card market are:
- Giesecke and Devrient
- Oberthur Technologies
- Kona International
- CardLogic Corporation
The global smart card market can be divided in the following areas depending on its market segments, major geographies, and current market trends. Geographically the global market can be segmented in the following area. Most of the market research reports segment the global market into:
- North America
- Asia Pacific
- Rest of the World
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