Smart Card Vendors Predict Strong Growth in 2005

Wrapping up a strong 2004, smart card vendors predict another good year in 2005, led by healthy demand in the mobile-phone and banking sectors and new demand in government identity projects. In the industry's core product, the microprocessor-based chip cards that command higher prices, the vendor association Eurosmart predicts 18% growth in 2005, to 1.49 billion units, up from a projected 1.25 billion for the full year 2004. By far the largest demand comes from the small smart cards, known as subscriber identity module, or SIM, cards used in more than half of the world's mobile phones. SIM card demand is expected to grow to 1 billion units in 2005, up 14% from an unexpectedly strong 880 million units this year ven faster growth is expected in banking and retailer cards, projected to grow 21% next year to 290 million cards from 240 million this year. Much of this year's growth came from the United Kingdom, where banks are well on their way to converting magnetic-stripe credit and debit cards to smart cards. Olivier Piou, president of Eurosmart and CEO of France-based smart card vendor Axalto, speaking at a news conference today at the Cartes exposition in Paris, said growth next year is expected from banks in such countries as Italy, Spain, Turkey, Thailand and Japan. Government and health care is projected to grow 89% to 85 million units as governments introduce chip-based passports and ID cards. Counting the less-expensive memory cards used mainly as prepaid phone cards and in mass transit, chip card sales are expected to grow just over 10%, from 2.11 billion units this year to 2.33 billion in 2005 urosmart is an association of European smart card vendors that represent more than 80% of the total chip card market.