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| Subject: Sony Mitsubishi ERG AES Prodata Hong Kong. | |
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Author: Sony Mitsubishi ERG AES Prodata Hong Kong. |
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Date Posted: 23:58:16 01/29/03 Wed In reply to: It has formed consortium with AccentureThalesMTRC 's message, "Thanks Pork--I'm emailing this to Walt---SteveOctopussy" on 21:53:14 01/29/03 Wed Hong Kong SMART CARD TECHNOLOGY -------------------------------------------------------------------------------- TITLE: SMART CARD TECHNOLOGY SUBJECT COUNTRY(IES): HONG KONG POST OF ORIGIN: HONG KONG SERIES: INDUSTRY SECTOR ANALYSIS (ISA) ITA INDUSTRY CODE: CPT DATE OF REPORT (YYMMDD): 971201 DELETION DATE (YYMMDD): 001201 AUTHOR: FANNY CHAU APPROVING OFFICER: CONSTANCE TAUBE OFFICER'S TITLE: COMMERCIAL OFFICER NUMBER OF PAGES: 25 INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 1998. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES SUMMARY Hong Kong is rapidly adopting new applications for smart card technology in a variety of sectors, including the transportation, telecommunications, and financial services sectors, among others. Industry observers estimate that the number of smart cards in use in Hong Kong is likely to reach 15 million by the year 2000. Among the increasingly popular smart card projects newly introduced in Hong Kong are the GSM SIM card, pre-paid phone cards, Mondex, Visacash, Compass card and the Octopus card. The incorporation of a microprocessor in smart cards, which offers additional power, versatility and security against fraud, make smart cards a significant improvement over conventional magnetic strip cards. The development of innovative smart card solutions for use in both the private and public sectors will help sustain Hong Kong's competitive edge as an important and vibrant international financial, trading, telecommunications center in the region. With the growing use of smart cards, demand for chips, smart card solutions software and hardware will be in increasing demand in the coming years. A. MARKET HIGHLIGHTS & BEST PROSPECTS Market Profile-Worldwide A smart card is a device similar in size and appearance to a credit card, made from plastic, and containing an embedded Integrated Circuit (IC) chip that enables the storage and processing of information and transactions. IC cards can be defined by the capabilities of the chip: * Memory cards, which merely store data and have no data processing capabilities. * Hardwired Logic, Intelligent Memory cards, which contain simple Application Specific Integrated Circuit (ASIC), usually used to control the access to the memory of the card. * Microprocessor cards, which contain a microprocessor to execute a program stored inside the same silicon chip and can make decisions based on external input. Microprocessor cards are true smart cards which are used in banking, finance and other applications where high security is essential. Very often the data processing power is used to encrypt/decrypt data, which makes this type of card most appropriate for application requiring security features. The following table shows the worldwide output of the major smart cards vendors and the percentage of microprocessor smart cards in 1993: 1993 Actual Chip Card Production Worldwide Percentage of which are Manufacturer Cards(in million) Microprocessors Cards Gemplus 103 73 Schlumberger 60 7 Giesecke & Devrient 38 8 ODS Oidenbourg 30 0 Bull CP8 15 0 Philips 14 33 GPT 10 57 Orga 6 8 Total 329 12 Source: Gemplus Production of smart card systems is a major new global industry which is just taking off. According to figures compiled by the French company Gemplus, worldwide smart card production in 1993 was 329 million units. The number grew to 420 million in 1994, 500 million in 1995, and 800 million in 1996. It is anticipated that the number will grow to 3 to 4 billion units by the year 2000. Smart Card Worldwide Market Forecasts 1994 2000 Average Sectors (million units)(million units) annual growth Phonecards 310 1400 29% GSM cards 9 50* 33% Health cards 62 400* 36% Bank & loyalty cards 20 500* 71% Identity cards 1 400* 171% Transport tickets 1 200* 142% Pay-TV cards 10 100* 47% Games 1 500 182% Meters 2 50 71% Automatic dispensers 4 200 92% Total 420 3800 44% *microprocessor cards source : Gemplus Estimated Worldwide Smart Card Sales By Area : 1997 2000 Area (Market share) (Market share) Europe 78% 40% Asia Pacific 15% 40% U.S. 7% 20% source: Gemplus By the year 2000, new smart card applications are expected to create a demand for 3.8 billion cards worldwide. The most prevalent applications in the smart card market are phone cards, personal identification cards, health care and loyalty cards. These applications are likely to be integrated with financial applications in multifunction smart cards. The two largest geographic markets are projected to be Europe, which is currently the dominant market accounting for 78% of smart cards in use, and the Asia Pacific region. Among the factors accounting for the increased interest in smart card technology applications are the following: * The declining cost of smart cards, which are now available in the cost range of U.S.$1 to U.S.$10. * The increasing concern about fraud associated with magnetic strip card systems. Smart cards on the other hand provide an excellent level of data security and offer very strong protection against falsification and misuse. The card and the system can mutually verify authenticity, and the identity of the cardholder can also be verified by use of a personal identification number (PIN). Data stored on the card is secure against espionage and manipulation even during the data transmission process over a network. * The incorporation of a microprocessor, which enables one smart card to independently manage several applications. * Data storage capacity: smart cards offer a much larger data storage capacity, about 100 times larger, than magnetic strip cards. Therefore, they can gather demographic information for business to better understand and service their customers, and offer co-branding opportunities, leading to new marketing possibilities. * The growing interest in remote transactions utilizing telephones, personal computers, and the Internet, which require greater security than has been available in the past. * Transaction speed: contactless smart card can enable speedy transactions. * Compatibility with portables electronics (e.g., PCS telephones, etc). A smart card can be a memory card or a microprocessor card; disposable or reusable; contact or contactless; single or multi-functional. A smart card can be used for applications such as access control and identification; automatic fare collection for buses, trains and airline travel; industrial automation applications in asset tracking, warehouse and inventory control, facilities and equipment management and manufacturing automation; financial transactions in banking; electronic purse applications in retail stores; loyalty program such as frequent flier and frequent buyer bonus plan; parking; petroleum retail; health care; as well as telecommunications application such as payphones and mobile phones network access. Market Profile-Hong Kong Estimated Hong Kong Smart Card Usage By Sectors Year 1997 2000 Sector (Units in 000') (Units in 000') Telephone cards 2,500 3,500 Transportation 2,500 4,500 Electronic Purse 300 2,000 Membership Cards 100 1,000 Loyalty Programs 300 2,000 Health Care 100 1,000 Others 200 1,000 (games, University etc.) Total 6,000 15,000 * Statistics estimated by Gemplus The use of smart cards in Hong Kong will likely reach 15 million pieces by the year 2000, up 150% from 1997 levels. The major use will continue to be for mobile telephone, access control, fare collection and banking applications. However, the future trend will be toward the development of multi-functional smart cards, which carry more than one application, and thus offer convenience to users who will not have to carry many cards. Along with the development of multi-functional smart cards will be a growing demand for chips with higher processing capability and memory space, such as chips with 32k bits or 64k bits. Best Sales Prospects * IC chips * IC cards * Card Readers and terminals * Application software * System integrators * Support service providers who offer consultancy * Phones or set top box with card reader slot B. COMPETITIVE ANALYSIS Competitive Factors Local supply of both chips and smart cards is very limited. Most chips and cards used in Hong Kong are imported mainly from Europe, the U.S. and Japan. Local companies' involvement in the smart card business is primarily in the provision of systems integration and smart card solutions. Suppliers for Chips: Smart card manufacturers usually do not make their own chips, but purchase from semiconductor suppliers such as: -Japan: Hitachi, Toshiba, NEC, Oki; -U.S.: Texas Instruments, Atmel, Catalyst, Motorola, Microchip; -Europe: SGS-Thomson (France), Philips (Netherlands), Siemens (Germany). The world market share of chip manufacturers through year 2000 is estimated as follows: Chip Manufacturer Market Share(%) Motorola 18 Texas Instrument 15 SGS-Thomson 12 Siemens 10 Atmel 6 Hitachi 4 Others 35 Suppliers for Smart Card The majority of smart card manufacturers are from Europe, as the technology and applications innovations emerged first in Europe. The main suppliers of smart cards are: -Europe: Gemplus, Schlumberger, Giesecke & Devrient, CP8, ODS, De La Rue Card Tech., Philips Comm., Systems, Digicard, Solaic. -U.S.: Ammi, Datacard, IBM, Micro Card, Orga Card Systems, -Japan: Toshiba. Schlumberger Hong Kong opened a smart cards manufacturing facility in Hong Kong in September 1997. The company manufactures approximately 10 million cards per year, supplying the Asia Pacific region. The world market share of smart card manufacturers estimated through year 2000 is as follows: Smart Card Manufacturers Market share(%) Gemplus 25 Schlumberger 21 G&D 12 Solaic* 8 CP8 6 Orga 5 Other 23 *merged with Schlumberger Suppliers of Systems & Terminals -U.S.: AT&T, VeriFone, Hypercom, Diebold/Schlumberger, IBM. -Europe: Amphenol, Philips Communication Systems, CP8 Transac, Orga Kartensysteme, ODS R. Oidenbourg Datensysteme. -Japan: Toshiba, Hitachi. The world market shares estimated through year 2000 System and Terminal Suppliers Market Share(%) VeriFone 27 Schlumberger 15 Hypercom 13 Fortronic 9 Dassault 8 Micro Card 7 Others 21 U.S. Market Position and Share At present, most of the smart cards employed in Hong Kong are manufactured in Europe, with some from Japan as well. GSM cards used in mobile telephones are mainly supplied by European manufacturers such as Gemplus, Schlumberger, G&D. Another significant enduser of smart cards, the Hong Kong Jockey Club, is using 8k bits microprocessor cards, named the Electronic Shroff Card, supplied by Gemplus for use at self vending betting terminals. A third major smart card project in Hong Kong is the Octopus card, launched by Creative Star Ltd. in 1997. This contactless card, is used for automated transportation fare collection in the territory. The cards used in this project is supplied by Sony and Mitsubishi Corp., with 1k bit of memory. The participation of U.S. companies in the local smart card market to date has been primarily in the aspect of providing the operating system, software and the supply of microprocessor chips for the cards, and not in the area of actual supply of the cards themselves, or of card readers. For example, Hypercom, Inc (an American firm) has a partnership with Asia Chip Card (a joint venture of Siemens and Giesecke & Devrient) to provide smart cards and terminals, network and system software for Hutchison Group and Overseas Trust Bank in a smart card loyalty project called the Visa Compass Card. This project uses 8k bits smart card which has incorporated chips manufactured by Siemens. C. END USER ANALYSIS Most of the smart card projects in Hong Kong have been initiated in the private sector. The principle end-user groups are as follows: Transportation In June 1994, Hong Kong's five major privately-owned public transportation operators (Mass Transit Railway Corp., Kowloon-Canton Railway Corp., Kowloon Motor Bus Company, Citybus Ltd., and the Hong Kong and Yaumatei Ferry systems) formed a joint venture company, Creative Star Ltd., to develop an automated fare collection system based on contactless smart cards. The fare collection contract, valued at U.S.$55 million, was awarded to ERG Australia Limited and its subsidiary AES Prodata, which subsequently awarded the contactless card portion of the contract to Sony and Mitsubishi Corporation. These contactless reloadable smart cards, known as Octopus cards, were introduced to the general public in September 1997. An estimated 10 million passenger journeys are made each day on Hong Kong's wide variety of public transport services. Currently, 2.5 million cards have been issued and this number will likely grow to 3.5 million cards by the end of 1998, making this the largest multi-operator transportation application in the world. Creative Star is also negotiating with Mondex and VisaCash to incorporate an electronic purse function into its originally closed system. [ Next Thread | Previous Thread | Next Message | Previous Message ] |
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| Re: Sony Mitsubishi ERG AES Prodata Hong Kong. | 2nd part | 00:00:20 01/30/03 Thu |
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