Eric, I Found this article on the Atmel thread. No link was provided:
''Operators were willing to buy any sort of card, at any price quoted."
Asia-Pacific faces acute smartcard shortage, NEW STRAITS
Source: Associated Press
Publication date: 2001-01-03
IT has been several hectic months of smartcard manufacturers supplying the Asia-Pacific market at top capacity
to meet surging telecoms demands from the region. Reports from smartcard manufacturer Schlumberger reveal a
shortage so acute that several telecommunications operators have on numerous occasions been forced to the
edge.
''Operators were willing to buy any sort of card, at any price quoted.
There was even a telecommunications operator which was willing to buy cards that already had their
competitors' artwork on them,'' reveals Claus Hansen, GSM director for smartcards at Schlumberger Test &
Transactions Asia.
The desperation is understandable especially in a competitive industry where consumer alliance to mobile
network operators wavers so easily. It would be disastrous not to be able to provide the prepaid phone kit or
market mobile services in time.
UNPRECEDENTED GROWTH An accumulation of several factors contributed to this acute smartcard
shortage. ``Being cyclical, the semiconductor industry was just coming out from its lowest possible capacity and
it coincided with a time when the demand for chip-embedded cards were just started to spiral,'' says Hansen.
The recovering Asian economy fuelled the demand by telecommunications operators and electronic gadgets
manufacturers (for example, Sony Playstation producers) for the cards, wiping out supplies which could not be
replenished in time. ``The complexity of setting up a new smartcard factory takes between six to 15 months,''
explains Hansen.
The sudden growth in Asia's wireless communications market is another reason, with China being the single
largest growth factor so far. The mobilisation of this gigantic market last year, mostly from mobile businesses,
recorded a 200 per cent growth rate in China's telecommunications industry. This is double the forecasted 100
per cent growth anticipated earlier last year. ``China alone could take Schlumberger's entire card supply
allocated for Asia for 2001,'' says Hansen.
CARD UPGRADE Major technology changes also happened in markets such as Taiwan, Hong Kong and
Korea which have a GSM penetration average of about 50 per cent.
In these markets, a major trend is the move from pure voice to SIM Tool Kit (STK)-based data services.
In line with this trend, low-memory phone cards are being phased out throughout the region. Although about 60
per cent of Asia is still based on the 8K smartcard, it is anticipated that this percentage will quickly decrease to
less than 30 per cent by the end of this year as telcos try to harness the benefits and revenue from offering more
memory-intensive data services. ``Six months ago, the Philippines was a pure 8K country. But today, two of its
major operators are moving to 32K. Prime telcos in Taiwan and China are already moving a big portion of their
subscribers to 32K,'' says Hansen.
He reports that many telcos have placed orders for millions of 32K memory-boosted cards to replace the older
8K cards at no cost to their subscribers in order to enable more mobile applications such as online banking and
Internet content on demand.
PREPAID POTENTIAL Other than smartcard consumption in the telecommunications industry-the bulk of it in
conventional GSM mobile handsets and payphones-the prepaid mobile phone segment is expected to churn
even greater demand for smartcards. China again is forecasted to be a very significant market for the prepaid
mobile phone cards.
Unlike Malaysia and the Philippines where prepaid mobile phones already make up a major percentage of the
mobile market, the prepaid trend in China has hardly taken off yet although major telcos are just starting to
introduce it. ``Imagine what potential there is for prepaid cards in China when the trend hits,'' says Hansen.
JAPAN JUMPS IN The already acute shortage of smartcard is heightened by the sudden new demand from
Japan for SIM cards. Smartcards for handsets were never in demand in the country of proprietary PDC mobile
network, as the application and security features of wireless communication is in-built on the handset's hardware
itself.
However, because of PDC's proprietary nature, Japanese users have always been hindered in the function of
mobile roaming. ``Hence Japanese telcos are handicapped because roaming contributes a huge revenue for
phone companies, and PDC's limitation is hurting them a lot,'' says Hansen. The PDC technology also
experiences challenges in security for mobile commerce (m-commerce), unlike smartcard-based GSM phones
which provide a practical, secure platform to build mobile applications.
Therefore, in Japan's progression to 3G technology that will also solve these problems, it is well expected that
smartcards will become the new equation in the country's mobile communications industry.
NEW PLAYERS EMERGE The telecommunications smartcard shortage has rendered the region's card supply
and demand mechanism rather simplistic for some time now. ``People will just buy from whoever has the cards.
If you have no cards, then you lose the business,'' says Hansen. Hence, this situation encouraged the emergence
of smaller card vendors to capitalise on the desperate situation.
''Although the technology, support, and security of these alternative cards from new suppliers are of a lower
standard, people still buy them,''
says Hansen.
A reason for this is that the telecommunications industry is still not at the level where a reputable
``Schlumberger'' or ``Gemplus'' brand is insisted upon. Nonetheless Hansen says that major telcos in Asia still
pretty much rely on the two big smartcard providers-jointly dominating more than 90 per cent of Asia's
smartcard market for their supplies due to proven reliability.
The Associated Press News Service
Publication date: 2001-01-03
© 2000, YellowBrix, Inc. |
