While countries that have not yet achieved mass deployment of contactless smart cards could experience further delays, more advanced countries such as Japan and South Korea that possess strong contactless infrastructure and high penetration rates are unlikely to slow down drastically.
In fact, some countries continued to expand and new projects, particularly in mobile payments, flourished in 2008 despite the turbulent economic environment.
New analysis from Frost & Sullivan (smartcards.frost.com), Asia Pacific Contactless Smart Card Market, finds that the market earned revenues of $769.4 million in 2008 and estimates this to reach $1356.0 million in 2014.
Ongoing issuance of projects such as e-passport and mass transit ticketing will continue and applications will expand to include contactless and mobile payments. Some other contactless applications that will insulate the market from the downturn are upgrades and replacement cards.
Despite this positive outlook, market participants must be prepared for a lower volume and revenue growth rate, as some new projects and expansion programs could be delayed or shelved.
"Applications that may suffer are perhaps new projects in entertainment, tourism, travel, or access control – especially when there are cheaper alternatives and converting to smart cards may not be a priority at this point in time," says Frost & Sullivan Industry Analyst Michelle Foong. "For instance, contactless payments may not be popular in countries that are just starting to expand or launch various projects."
To ride out this unstable phase, market participants should promote their products' ability to create a more efficient and cost-saving system in the long term, be it in the mass transit, government, or other industry. This benefit will be even more apparent if there are multiple applications. At a time when participants need to restrain spending, vendors should revisit successful business cases and emphasize the long term cost savings and efficiency that resulted from them.
"Currently, there are many well-established projects in the region such as Ez-Link in Singapore, T-Money in South Korea, and EasyCard in Taiwan," notes Foong. "Similarly, with e-passports, there are spillover benefits through learning, wherein a country adopts e-passports and later considers using the same platform for its national IDs or driving license cards."
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Asia Pacific Contactless Smart Card Market is part of the Smart Cards Growth Partnership Services program, which also includes research in the following markets: global smart card market, world SIM market, world smart card banking market. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews with the press are available.
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Asia Pacific Contactless Smart Card Market / P18A