Strategic Analysis of the Brazilian Smart Card Market

Frost & Sullivan, July 2006

This Frost & Sullivan research service titled Strategic Analysis on the Brazilian Smart Card Market provides an overview of the total smart card market and its main segments in Brazil. In this study, Frost & Sullivan's expert analysts thoroughly examine the following application segments: GSM/SIM, financial (banking and payment), government (IDs and others), transport, and access control.

Market Sectors

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

- GSM
- Financial (banking and payment)

- Government IDs

- Transport

- Access control

Technologies

The following technologies are covered in this research:

- SIM platform

- EMV platform

- Microprocessor cards

- Mifare technology

Market Overview

Demand for Value-added Services and Introduction of High-end SIM Cards Drive Growth of Smart Cards Market
With a population of over 180 million and sustainable economic growth, Brazil offers numerous unique opportunities for the smart card industry. The examples on this are the introduction of high-end SIM card, EuroPay, MasterCard, Visa (EMV) cards’ expansion into the banking and payment market segments, as well as the promise of smart identification into the largest country in Latin America, according to the analyst Alejandra Etcharran. This allows key market participants to offer value-added services, while assuring long-term revenues.
SIM cards lead the smart card market's production and revenues in Brazil. The GSM market maintained a 99 percent increase per year in 2005, achieving more than 44.5 million subscribers. On the contrary, code division multiple access (CDMA) obtained 24.1 million, while time division multiple access (TDMA) technology possessed 17.4 million subscribers. The GSM family of technologies is used by seven out of eight Brazilian mobile wireless service providers, which clearly indicates that no other wireless technology matches GSM's scope and scale.

Emphasis on Value Addition of Smart Cards Likely to Overcome Challenge of Low Level of Awareness
It is imperative to raise awareness with customers in each market segment about the smart cards' value addition for generating different business opportunities, while providing all kind of benefits, convenience, and increased security. The challenge remains in offering value-added services in ways that they are both affordable to different end users and profitable for the Government and the involved companies. This can be achieved through improved product portfolio and tariff schemes for service-added offerings according to the target market needs, such as time saving, comfort, and entertainment.
The difficulty is on developing strategies that approach a wide number of low-income customers in both urban and rural areas, while still providing adequate infrastructure for the city centers, explains the analyst. Low-income population represents the largest opportunity for achieving high smart card penetration level. However, increasing incidents of fraud in e-banking and payment is likely to boost demand for smart cards.

1 EXECUTIVE SUMMARY

Market Overview

1. Strategic Analysis of the Brazilian Smart Card Market

2 GENERAL MARKET ANALYSIS

Market Issues

1. Market Overview

2. Market Drivers

3. Market Restraints

4. Market Challenges

Market Forecast and Trends

1. Market Forecasts and Trends

3 ANALYSIS BY APPLICATION

SIM Market

1. SIM Smart Card Market

2. Market Drivers

3. Market Restraints

4. Market Forecasts
Financial Segment (Banking and Payment)

1. Financial (Banking and Payment) Smart Card Market

2. Market Drivers

3. Market Restraints

4. Market Forecasts

Government ID and Others

1. Government ID and Others Smart Card Market

2. Market Drivers

3. Market Restraints

4. Market Forecasts

Transit and Access Control Segments

1. Transport and Access Control Smart Card Markets

2. Market Drivers

3. Market Restraints

4. Market Forecasts

4 COMPETITIVE LANDSCAPE

Brazilian Smart Card Market Participants

1. Brazilian Smart Card Market Participants

2. Axalto

3. Gemplus BankNote (Gemplus)

4. Sonsun

5. GD Burti (Giesecke & Devrient)

6. Daruma Orga (Sagem Orga)

7. Oberthur Card Systems

List Of Figures

Chapter 2

- Total Smart Card Market: Drivers Ranked in Order of Impact (Brazil), 2006-2011
- Total Smart Card Market: Restraints Ranked in Order of Impact (Brazil), 2006-2011
- Total Smart Card Market: Challenges (Brazil), 2006
- Total Smart Card Market: Unit Shipment Forecasts (Brazil), 2003-2011
- Total Smart Card Market: Revenue Forecasts (Brazil), 2003-2011
- Total Smart Card Market: Percent of Unit Shipments by Application (Brazil), 2003-2011
- Total Smart Card Market: Percent of Revenues by Application (Brazil), 2003-2011

Chapter 3

- SIM Smart Card Market: Unit Shipment Forecasts (Brazil), 2005-2011
- SIM Smart Card Market: Revenue Forecasts (Brazil), 2005-2011
- Financial (Banking and Payment) Smart Card Market: Unit Shipment Forecasts (Brazil), 2003-2011
- Financial (Banking and Payment) Smart Card Market: Revenue Forecasts (Brazil), 2003-2011
- Government ID and Others Smart Card Market: Unit Shipment Forecasts (Brazil), 2003-2011
- Government ID and Others Smart Card Market: Revenue Forecasts (Brazil), 2003-2011
- Transport and Access Control Smart Card Market: Unit Shipment Forecasts (Brazil), 2003-2011
- Transport and Access Control Smart Card Market: Revenue Forecasts (Brazil), 2003-2011
- Transport and Access Control Smart Card Market: Unit Shipment Percentage Split (Brazil), 2003-2011

Chapter 4

- Total Smart Card Market: Unit Shipment Market Shares (Brazil), 2005
- Total Smart Card Market: Revenues Market Shares (Brazil), 2005

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