F&S predicts smart growth for smart card market

New analysis from Frost & Sullivan, World Corporate Security (Logical
& Physical Access Control) Markets, reveals that the revenue in the smart
card market totaled $94.7 million in 2004 and projects to reach $149.9 million
in 2010.

"Growing security needs of businesses across the world are expected to
continue to push the adoption of smart card-based corporate ID system,"
explain Frost & Sullivan senior analysts Jafizwaty Ishahak, Karthik
Nagarajan and Anoop Ubhey.

"Smart cards have the ability to provide enhanced security through
multiple factors of authentication and can perform cryptographic algorithms
without exposing the entire personal information of an individual when it is
presented."

Smart cards also have greater data storage capabilities. Moreover, the WLAN
consortium defines the specifications for worldwide access to wireless LAN
networks with smart card security and related capabilities across market
segments.

The revenue in the smart card market to reach $149.9 million in 2010

Recently, it released a complete set of specifications that allows telecom
operators to easily extend subscriber identity module (SIM)-based authentication
for use in hotspots.

Despite such beneficial features, organizations shy away from intensive
adoption of smart cards due to high investment costs. Smart card-based access
control systems are more expensive compared to magnetic stripe, proximity cards
and barcodes.

"Unlike products that are purchased to fulfill a certain set of
activities that would result in savings for the company, profits from smart
cards, which prevent loss, are difficult to calculate resulting in North
American manufacturers hesitancy about immediate adoption," says Karthik.

The companies in the Latin American region are yet to realize the long-term
advantages of migrating to smart cards technology. The high initial costs of
smart cards are highlighted by the legacy systems they use, which gives them

a false sense of security.

In Europe, Middle East, Africa and Asia Pacific, low-cost alternatives to
smart cards have remained an obstacle toward adoption of smart cards. In
non-critical usage scenarios, the initial cost of these alternatives makes smart
card solutions expensive. However, the importance of smart cards to corporate
systems is evident from its strong government backing.

With a revenue forecast compound annual growth rate of eight percent, the
future of the smart cards market is secure due to the high level of privacy it
assures, its multi-application appeal, heightened need for security in
businesses globally and increased number of mobile users in the corporate
networks.

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