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Government ID, payment and SIM applications account for 87% of all smart card shipments, says ABI Research

Press release, September 18; Alex Wolfgram, DIGITIMES [Thursday 18 September 2014]

Smart card shipments totaled eight billion units in 2013, with government ID, SIM, and payment and banking applications accounting for 87% of all shipments, according to ABI Research. Of these three market verticals, Gemalto, Oberthur Technologies, G&D, and Morpho led the way with a combined 2013 market share of 66%. It is expected that these three applications will spur market growth and account for 89% of all smart card shipments in 2019.

For Government ID, shipment volumes are expected to increase over two-fold between 2013 and 2019. Opportunities in the continued migration to e-passports will be further boosted by the introduction of the SAC specification alongside migration to second generation credentials by countries that wish to utilize and integrate contactless functionality alongside existing contact applications.

ABI Research added that in terms of payment & banking: EMV and smart card adoption is forecast to increase from 1.67 billion units in 2013 to 3.33 billion in 2019. As of third-quarter 2014, the year has been prosperous with the US beginning widescale EMV card issuance, alongside China, ramping up its PBOC migration. Moving forward other growth countries including Indonesia and India will add additional volumes.

For SIM, the biggest question mark resides in the SIM card market. SIM card shipments decreased in 2013, down to 4.9 billion units from a previous 5.1 billion. A difficult 2013 has raised questions around the ability for the SIM market to bounce back.

ABI Research senior analyst Phil Sealy commented, "Despite on-year SIM shipments decreasing by near 220 million units in 2013, SIM cards still accounted for 61% of all smart card shipments. The fear is SIM card shipments will continue to decline steadily over the next few years and given its penetration rate, it is a scenario which could prove extremely damaging. Despite these concerns, ABI Research strongly believes SIM card growth will return in 2014. We are already seeing greater SIM penetration into other connected CE devices, driving a new wave of growth. Additionally, embedded SIMs could trigger greater adoption into M2M applications and likely reduce the cost barriers for inclusion into CE devices. The message is not to write off the SIM card market just yet, as new opportunities are on the horizon."

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