154 million euros during the quarter. However,similar to other vendors this was tempered by afall of nearly 20% in average SIM prices.

The companys financial services unit witnessedaccelerated EMV card deployment across Europeand Japan. In total it shipped 22.1 millionmicroprocessor-based banking cards, up 30% year-on-year. Revenues for the unit rose to 58.9 millioneuros, up 11% from the third quarter of 2004.

Gemplus identity and security unit recordedsales of 21.5 million euros for the quarter comparedwith 8.5 million euros posted for the third quarterof 2004. These figures include revenue from Setec.

Out of the three companies to have reported theirfinancial figures for the third quarter Axalto was theonly one to have posted a fall in sales. Remainingupbeat, however, Olivier Piou, Axaltos chiefexecutive officer said: The strength of our businessin the Americas, the excellent start of financialcontactless card deliveries, and commercial successesin the EMEA region fully compensated thepredicted significant slowdown in Asia and delays inelectronic passport projects around the world. SIMcard sales fell marginally (1.5%) to US$135.2million, however, Axalto said it shipped more than77 million SIMs during the quarter, a rise of 17%from the third quarter of 2004. Average pricesdropped by 18% during the quarter, but this wasbalanced to a degree by the fact that almost 40% ofthe cards sold during the three month period werehigh-end cards a 50% increase on the comparablefigure of a year ago.In its financial cards unit, Axaltoposted sales of US$49.1 million for the quarter, up4.2%. This represented unit sales of 20 millionmicroprocessor cards.

The company also reported lower sales in itspublic sector and access unit, which fell 16.4% toUS$15.2 million. Axalto said that activity remainssubject to large projects timelines and decisioncycles, and has not yet started to benefit from theglobal ramp up of national identity programs aimedat deploying electronic passports and ID cards.

national id

Morocco awards new IDcard contractMorocco is to roll out a national identity cardbased on biometrics and contactless cardtechnology. It is believed that this configurationwill be a world first for a national ID card.

(Note: An exclusively contactless interface may besomething new, but other national ID cards do takeadvantage of contactless technology. For example,Malaysias national MyKad ID card contains a64K chip that is dual interface, meaning it can beused in either a contact or contactless manner.)

The contract to produce and personalise thenational identity cards was won by Frenchsystems integrator Thales and was awarded bythe countrys national security service (DGSN Direction Gnrale de la Scurit Nationale).

Local production centres are expected to beoperational within 12 months and Thales willmanage the production for a period of four years,during which time around 20 million ID cardswill be produced. The contract is valued at morethan Euros 100 million.

According to Thales, contactless ID cards andbiometrics will ensure maximum documentsecurity for a guaranteed card lifespan of tenyears. The system will include personal detailsand biometric data and meets new securityrequirements concerning travel documents andthe control of migration.

The solution comprises ID documentproduction equipment and software, high-security consumables and connectivity with anAutomated Fingerprint Identification System(AFIS) provided by Cogent.

Production/personalization equipment, con-sumables and materials for the production of the e-ID cards will be provided by Agfas SpecialtyProducts business unit. The company will embedthe contactless chip module with small antenna ina polyester structure.

Leo Alaerts, Agfas specialty products businessunit manager commented: With this largecontract Agfa enters the growing field ofpersonal, high-security plastic electronic IDdocuments with a comprehensive systemincluding hardware, software and consumables.Contact: Michle Bogatirsky at Thales SecuritySystems,Tel: +33 1 40 83 23 51, Web: www.thalesgroup.com

market

Americas can expectrapid growthNew statistics claim that the market in theAmericas will grow rapidly over the next fiveyears.

4Card Technology Today November/December 2005

news

The Swedish Police Department is to usepassport readers supplied by ACGIdentification Technologies and Arcontiawithin its new electronic passportinfrastructure. Approximately 320 units havebeen installed in local police stations acrossthe country. ACGs HF Dual ISO plug & playreader modules were selected for the projectand Arcontia modified the modules to fit therequests of the Swedish Police, creating a newcustomized housing, developed to fit bothelectronic passports and national ID cards.

Japanese credit card issuer JCB has joinedVisa and MasterCard International in theirefforts to align PIN Entry Device (PED)security requirements and approvalprocedures. It is hoped that PEDmanufacturers submitting devices for securitytesting will be able to rely on a single set ofstandards, helping ensure cardholder securityand providing faster time-to-market forfinancial institutions. This move by JCBfollows a year of collaborative efforts to reducetesting cycles which began in October 2004.

MasterCard International has announced itscollaboration with Pocket Card and ItochuEnex for a pilot launch of the MasterCardPayPass contactless payment programme. This isthe second MasterCard PayPass pilot programto be launched in Japan and from Decemberthis year Car Enex Itsumo cardholders will beable to use PayPass at selected Itochu Enexservice stations in Chubu, Japan.

French bank Groupe Caisse dEpargne hastaken delivery of limited edition GemLucencecards from Gemplus. In a bid to appeal to theyouth market and increase market share thetranslucent payment cards have a mandarintinted transparent card body, specificallydesigned to appeal to 16 to 25 year olds. Inaddition, to promote exclusivity, availabilityof the cards has been restricted to 100,000units. Gemplus has been focusing on cardgraphics and design and offers an assortmentof cards that come in a variety of forms andshapes, with full face holographic imagery aswell as an environmentally friendly range.

KeyBank is to roll out contactless debit cardsto its customers in the USA. It has selectedFrench smart card manufacturer Axalto tosupply more than two million MasterCardPayPass cards, which enable cardholders tosimply tap their card on the reader at checkoutinstead of swiping their card or handing it to astore employee. The KeyBank MasterCardPayPass card, which became available from 1September, also includes a magnetic stripe toallow customers to use it in any location thataccepts traditional MasterCard payments.

in briefCompany Q3 2005 Q3 2004 % ChangeGemplus 247.9 214.7 15.5Axalto 188.2a 197.9a (4.9)Oberthur Card Systems 124.5 107.9 15.4Notes:

a - these figures are converted into Euros from US dollars at the mid-market rate on 30 October 2005

Figure 1. Third quarter performance of three leading smart card manufacturers (Euros million)

According to research announced by analystgroup Frost & Sullivan and the Smart CardAlliance, North American smart cardmicrocontroller shipments will top 132 millionunits in 2005 and grow at a 27.7% compoundannual rate through until 2010.

In Latin America, growth will be even morespectacular, the report Americas Smart CardMarket Analysis claims, with 59.1% compoundannual growth forecast for shipments during theperiod. (Shipments in the region were 136.4million microcontroller smart cards in 2005.)

According to Randy Vanderhoof, executivedirector of the Smart Card Alliance: Its anexciting time to be in the smart card marketanywhere in the Americas. Things are happeningfast, and we felt it was important to provide abaseline to chart our progress.

USA/CanadaThe research showed that the SIM mobiletelecommunications market was the largest USmarket segment in 2004, followed by pay TV,payment/loyalty, government/ID and accesscontrol. However, Frost & Sullivan expects theSIM card share of total market to dropdramatically over the next five years as otherapplications become more widely deployed. Thefastest growing sectors will be payment andgovernment/ID, the analyst group claims.

Interest in contactless payment will drive USpayment market growth and the migration toEMV will be a factor in Canada. MeanwhileHSPD-12 is seen as a key driver for thegovernment and ID market with the deploymentof FIPS 201-compliant ID applications withinfederal agencies, as well as the US ePassport projectbeing the primary engines for growth.

Latin AmericaThe GSM mobile telecommunications market wasthe largest smart card market in Latin America in2004, while payment/loyalty accounted forvirtually all of the rest of the market.

According to Frost & Sullivan, these twoapplications will continue to lead shipments in theregion. Over the next five years, growth in SIMcard shipments will be the main driver as handsetreplacement, networks with newer technology,along with penetration of new subscribers usingprepaid SIM card options will keep shipmentsgrowing rapidly. In payment/loyalty, the migrationof the financial industry to EMV in Brazil andMexico will fuel growth at a steady rate in the shortand medium term, the report claims. Additionalcountries have also begun pilot projects for chip-based banking and payment cards and are expectedto contribute to growth.

Contact: James Politis at Frost & Sullivan,Tel: +1 210 247 3875, Email: jpolitis@frost.com

nfc

NFC technology in sixmonth trialThe French city of Caen is to be the locationfor one of the first large-scale trials of NearField Communication (NFC) technology.Using the touch-based technology, 200 Caenresidents will be able to use their mobile as ameans of secure payment in selected retailstores, parking facilities and famous touristsites around the town.

For the trial Royal Philips Electronics willwork with France Telecom R&D, networkoperator Orange, handset manufacturer Samsungand retailers Groupe LaSer and Vinci Park.

According to Philips, the Caen NFC trial isthe worlds first large scale trial of this emergingtechnology and the supplier hopes it willillustrate how consumers can securely and easilymake purchases and obtain information, simplywith the swipe of their mobile phones.

The range of services and applications for NFC-enabled Samsung D500 mobile phones includes: Retail applications: Groupe Laser chains,

which include Monoprix supermarket andGaleries Lafayette will be equipped withNFC payment terminals enabling users topay at checkout using their NFC-enabledphone. More stores will follow later in thetrial, along with a cashless payment schemein partnership with Cofinoga, the consumercredit arm of Groupe Laser.

Car parking access: When users wish to accessa car park, they simply pass their NFC-enabledphone in front of the entrance booth. The carpark ticketing application automatically issuesa virtual ticket on the mobile phone anddebits the cost from the users season card orpre-paid account when the phone is passedacross the terminal at the car park exit.

Tourist services: When an NFC-enabledphone is swiped across information points at

5Card Technology Today November/December 2005

news

Oberthur Card Systems has made a 2.5million euro acquisition of South African cardmanufacturer Africard. Located inJohannesburg for more than 15 years, the Visa& MasterCard certified Africard plant has aproduction capacity of 30 million cards peryear and holds approximately 40% of theSouth African banking card market. Labatsubsidiary Africard, which will be renamedOberthur Card Systems South Africa, willaddress the South African domestic marketand other English speaking African countries.South Africas forthcoming migration to EMVis expected to spill over into demand for GSMcards and emerging ID programmes.

Sharp Corporation has announced that its ICmodule for ePassports has received validationfor EAL4+ (Evaluation Assurance Level 4+) ofthe Common Criteria, an international securityevaluation standard. The module has a large-capacity flash memory (512KB) that holds dataon the physical attributes of the passport holder,and can handle high-speed data processing andrapid readout (424kbps) of passport data.Sharps IC module is among the first to be basedon the ICAO (International Civil AviationOrganization) ePassport recommendations, thesupplier claims.

The United States Air Force (USAF) is todeploy a new biometric and smart card securitysystem to secure information technology assets.Through Artemis Solutions Groups (ASG)authorised government reseller, PatriotSolutions, USAF is deploying 80 units of theiGuard Fingerprint and Smart Card accesscontrol security system to protect informationtechnology assets on an undisclosed air forcebase. The iGuard is a self-contained IP AccessControl Security appliance, capable of enrollingup to 20,000 users, that uses fingerprint andcontactless smart card technology integratedinto a seamless security solution that can beaccessed, controlled and maintained through aweb browser located on the internal network.

The TaiwanMoney Card has been unveiledin Kaohsiung by MasterCard International.Kaohsiung City Transportation Bureau,MasterCard and a consortium of industryplayers for the Kaohsiung City GovernmentTransportation Project gathered to celebratethe upcoming launch of the TaiwanMoneyCard at the Chi-Jing ferry terminal. Theelectronic ticketing system, deployed acrossseven counties in Southern Taiwan, will useMasterCards PayPass technology. The projectis now entering its final phase and theKaohsiung City Government intends todistribute 2005 TaiwanMoney cards to thepublic as part of a trial run.

in brief

What is NFC?

Jointly developed by Philips and Sony, NFC is acombination of contactless identification andinterconnection technologies that enables wirelessshort-range communication between mobiledevices, consumer electronics, PCs and smartobjects. The technology combines the functions ofa contactless reader, a contactless card and peer-to-peer functionality on a single chip. It is an openinterface platform that allows fast and automaticset-up of wireless networks, which also works as avirtual connector for existing cellular, Bluetoothand wireless 802.11 devices.

NFC is compatible with Sony's FeliCa card andthe broadly established contactless smart cardinfrastructure based on ISO 14443 A, which isused in Philips' MIFARE technology.