New Opportunities for Smart Card Readers From Online Authentication and Contactless Payment

The largest potential growth in the smart card readers and chipsets market over the short term has to come in the form of migration to next-generation payment technology. EMV migration in Europe, Asia Pacific and Latin America along with contactless payment in the United States is the most important application supporting the growth in the readers and chipsets market.

E-passports, national ID, driver's licenses and transit are also large markets for smart card readers in the medium term. The market opportunities from the government projects will grow tremendously in the medium term, which opens up numerous lucrative market opportunities.

New analysis from Frost & Sullivan (http://www.smartcards.frost.com ), World Smart Card Readers and Chipsets Markets, reveals that the market generated 6.9 million on units in 2004 and estimates to reach 33.0 million in 2010.

If you are interested in a virtual brochure, which provides manufacturers, end-users, and other industry participants with an overview of the latest analysis of the World Smart Card Readers and Chipsets Markets then send an e-mail to Tori Foster - Corporate Communications at tori.foster@frost.com with the following information: your full name, company name, title, telephone number, e-mail address, city, state and country. We will send you the information via e-mail upon receipt of the above information.

"With banks shifting their business model to online banking, the rate of growth in the smart card readers segment will be decided by whether the banks adopt PC-link readers or USB keys for user authentication," said Frost & Sullivan Industry Manager Anoop Ubhey.

There are better cryptographic algorithms available that make online authentication secure. EMV payment cards can be configured to contain digital signatures and keys for online authentication. It is more economical for banks to migrate to online banking than continue with the 'brick and click' model. In addition, with most enterprises and government agencies going in for logical access to their networks, the smart card reader infrastructure will become commonplace, making the transition easier.

"USB dongles and USB keys are giving fierce competition for smart card readers in the logical access market," says Frost & Sullivan Research Analyst Alejandra Etcharran. "With this market dominated by many small manufacturers, if the authentication market does not adopt smart card readers as a standard then the larger manufacturers will lose market share in this sector."

To overcome or stop any real threat coming from the smaller manufacturers, a careful monitoring of the logical access control market must be put in place. Taking on the smaller manufacturers on the price front would be difficult but they can be countered through volumes and innovative product offerings. Offering value adds in terms of software and service to issuers is another one which might prove to be more successful in the medium term. Using such tactics will allow you more time to dampen the approach from these companies.

World Smart Card Readers and Chipsets Markets, a part of the 9206 subscription, provides an overview and outlook for the market. This study has been segmented into analysis by type of smart card readers and by geographic region analyses. This research includes detailed market opportunities, industry trends and detailed competitive analysis that have been evaluated following extensive interviews with market participants. Interviews are available to the press.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics. For more information, visit http://www.frost.com .

World Smart Card Readers and Chipsets Markets

F270-33

Contact:

Tori Foster

Corporate Communications - North America

P: 210.477.8448

F: 210.348.1003

E: tori.foster@frost.com

Magdalena Oberland

Corporate Communications - Europe

P: +44 (0) 20 7915 7876

F: +44 (0) 20 7730 3343

E: magdalena.oberland@frost.com

Donna Jeremiah

Corporate Communications - Asia Pacific

P: +603 6304 5832

F: +603 6201 7402

E: djeremiah@frost.com

http://www.frost.com

Keywords in this Press Release: smart cards, smart card readers, chipsets, USB dongles, USB keys, EMV payment cards, contactless payment, online banking

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