Frost & Sullivan Honors Gemplus as Leader of Smart Card Readers Market

Gemplus has been presented the 2004 Frost & Sullivan Award for Market Leadership in the highly competitive world market for smart card readers. The company was the number one smart card reader supplier in 2003, with a 21% market share, shipping some 1.9 million units.

"Among the major smart card reader manufacturers, Gemplus is the only one to have significant chipset shipments in addition to its PC-link readers," notes Frost & Sullivan Industry Analyst Anoop Ubhey. "This extended market provides Gemplus with a significant edge over the competition and also positions it as a global provider of reader solutions, rather than being just a manufacturer of PC-link readers."

Gemplus' unit shipments of smart card readers (PC-link readers as well as chipsets for keyboards and electronic fund transfer and point-of-sale (EFTPOS) terminals) grew by a notable 20 per cent over the period 2002 to 2003. Last year, PC-link readers represented 65 per cent of Gemplus' unit shipment sales with reader chipsets completing the remainder.

Strong performances in key regional markets have further underlined the company's competitive profile. In 2003, the company implemented high-volume logical access control projects for governments and enterprises in South Korea, Taiwan and China.

In North America, the company has been working on high-volume enterprise security projects for Boeing, and Pfizer. OEM 1/81 3/8 agreements with large commercial and consumer electronics manufacturers have resulted in the integration of Gemplus' reader chipsets with standard PC equipment, such as keyboards and laptops. Growing EMV 1/82 3/8 migrations in Latin America are set to boost Gemplus' shipments to the region.

Gemplus has also been active in the Europe, Middle East and Africa (EMEA) region, through national ID projects in the Sultanate of Oman and the United Arab Emirates, and several projects for major banks in the United Kingdom. The company is now looking to leverage the anticipated rise in demand for PC readers in the EMEA region.

As an early entrant into the potentially high growth Chinese and Indian POS terminals markets, Gemplus is well positioned to capitalise on the growth opportunities of these developing markets. While China's concerted move toward EMV migrations is likely to generate demand for chipsets in the POS 1/83 3/8 terminals segment, PC-link reader and USB token shipments are also projected to grow substantially in the country over the short term. Gemplus, having a strong foothold in both segments, is on a path of continued revenue growth and profitability.

The company is one of the few manufacturers benchmarked to play a critical role in the interoperability testing phase of ICAO's e-passport specifications for the United States that is expected to be amongst the largest smart card projects in the region when implemented.

Consistently diversifying its reader portfolio, Gemplus now has competencies in contactless technology, basic PC-link readers, USB 'dongles', SIM copiers and chipsets for terminals. It is also a leading participant in the niche reader intellectual property rights (IPR) market segment.

"Gemplus' diversification provides it a much wider market spread than competing reader manufacturers specialising in PC-link readers alone. This arms the company with a high growth potential and also guards it against the market risks associated with individual markets - putting it on a path of sustained, long term growth," concludes Ubhey.