China smart card market: mobile communication cards dominate the market
2008-08-19

China smart card market: mobile communication cards dominate the market

In 2007, the Chinese smart card market overall continued growing, but the growth rate slowed down significantly compared with 2006. From the application of the overall market, the mobile communications card market is still pulling the main engine of growth as a whole. And the upgrading of the mobile communications card also eased the smart card market which is as a whole of “increasing output without increasing income of the situation.” in a certain extent. However, according to a report released by CCID consulting, the sales volume and sales revenue of China’s smart cards is dropping in 2008. It is said that the sales volume of China's smart card market reaches 250 million sets and the sales revenue reaches 1.32 billion Yuan in 2008Q1, a mild decrease compared to 2007Q1.

The mobile communication cards in 2008Q1 increases 12.5% over 2007Q1,but the ID card market shrinks because of its mature. And this is the main reason of the decrease of the whole market. In addition, the sales revenue of mobile communications card in 2008Q1 has larger growth than 2007Q1 due to the large numbers of mobile phone users and the capability upgrades of mobile communication cards. Figure 1: Sales Volume of China's Smart Card Market in 2008Q1 

In 2008, the main application market of China’s smart cards is accounting by mobile communication cards with CPU cards as the major medium and it is predicted to continue in a long term. And with the shipment of memory card ID card shrinking, CPU card’s market share, which occupied 74.2 percent in 2008Q1, will continue increasing. As for sales revenue, CPU card market exceeds memory card. The major reason is the decrease of the shipment of memory cards. Figure 2: Proportion Comparison of Product Structures' Sales Volume & Sales Revenue in China's Smart Card Market in 2008Q1 As the mobile communication card structure, CSM data business is in the dominance position in China Mobile communication cards in 2008Q1, and its shipment in this quarter reaches 155 million, more than 2007Q1. Meanwhile, the SIM cards applied in G network are still the principal part of mobile communication cards. And the UIM cards keep the same level with 2007Q1. PIM cards which are applied in PHS are still difficult to gloze its atrophic trend, whose market share continues to decrease. In 2008Q1, the obvious change in product structure is the appearance of USIM cards which are applied in 3G network. Because China's 3G network is still in probation period and there are only eight cities which begin to provide 3G network service, although the shipment of USIM card is small, it breaks through the old product structure of China Mobile communication cards. Figure 3: Product Proportion of China's Mobile Communication Cards Market in 2008Q1 (By Sales Volume) 

Currently, the domestic brands occupied the main market while there are only two foreign brands in china’s top ten brands in the smart card market. They are Euronext and Giesecke & Devrient. But Euronext is the first one in sales volume and sales revenue in smart card market while the fifth one is Giesecke & Devrient. However, these two manufactures shares are shrinking because of the domestic brands’growth. According to the CCID consulting, the top ten brands occupy 90 percent of the smart card market. And it predicts that other brands can hardly enter into the major market. Figure 4: Manufacturer Structure of China's Smart Card Market in 2008Q1 (By Sales Volume)