Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Racom Systems (RCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Gutterball who wrote (265)	8/18/1998 2:58:00 PM
From: Gutterball	Read Replies (2) \| Respond to of 468

Premature Glorification of the Smart Cards Market Leads to Current Disillusionment MOUNTAIN VIEW, Calif., Aug. 17 /PRNewswire/ -- Due to the initial interest of early adopters in the last decade, the smart cards industry had been galloping full speed ahead. It is only now that the industry is slowing down to see the warning signs of the difficult years ahead. The most vital issue for card manufacturers this year will be implementing strategies to survive the current market disillusionment. According to strategic new research conducted by Frost & Sullivan frost.com, Worldwide Smart Cards Application Markets and Worldwide Smart Card ICs Markets, the smart cards market has hit ''a market canyon'' in its transition from the embryonic to the developmental stage. Building from an in-house database of projects, Frost & Sullivan calculated the smart cards market to have issued 912 million cards in 1997. ''The smart cards industry is now ending its dynamic growth phase that resulted from installation by early adopters of the technology,'' asserts Frost & Sullivan Industry Analyst Alyxia T. Do. Smart cards manufacturers are now marketing to secondary adopters who demand that smart cards shift from being the new technological wonder to being a legitimate solution. The smart cards industry has yet to prove fully the technology's case as a legitimate business tool. Although manufacturers are still exploring potential killer applications such as Internet commerce and network security, the market has hit a wall as far as the end-user market is concerned. Warnings signs that the next years will be lean include the failure of the immediate materialization of stored- value card installations by bank card associations such as Visa and member banks, delays in project roll-out, and extreme pricing competition. Price levels for smart card ICs have declined by as much as 40 percent in the first and second quarters of 1998. This decline is only a symptom, however, of the overcapacity in the market. For instance, the Chinese market saw approximately 50 million cards sold in 1997, but the country's capacity is approximately 250 million. Other factors contributing to price decline include intensified market rivalry and a high rate of new entrants. The cumulative effect of these market forces will result in a market shake-out in which many smart card and IC market players will not survive. Those companies who do make it through the shake out will have to be able to distinguish between market development and market hype. This ability will be particularly important in hyped-up markets such as smart cards in network security applications. Initial positive signs in this market has been the growth of certificate-based public key infrastructure authentication systems and the implementation of device-driver support for smart card readers in the Microsoft Windows NT 4.0 and 5.0 platforms. Even so, comments analyst Do, companies will need to understand a number of key issues such as the impact of current legislation in the States on digital signatures, the prevalence of software-based authentication tokens over hardware-based tokens such as smart cards, and the exact timeframe in which PC and keyboard manufacturers will integrate readers into the hardware. Frost & Sullivan's new studies, Worldwide Smart Card Application Markets and Worldwide Smart Card ICs Markets, is one of two studies depicting the reality of the smart cards market. The study provides a project-by-project analysis and a country-by-country analysis. Also included are revenue forecasts, market shares, technology and market trends, competitive issues and strategies. Frost & Sullivan is an international marketing consulting company that monitors the automatic ID, electronic commerce and semiconductor industries for market trends, market measurements and strategies. This ongoing research is utilized to update a series of research publications such as #5555-26 Worldwide Smart Card ICs Market and #5716-11 World Markets for Smart Card and Magnetic Stripe Readers, and to support industry participants with customized consulting needs. Free executive summaries of all Frost & Sullivan reports are available to the press. Visit Frost & Sullivan's web site at: frost.com Report: 5780-11 Publication Date: Sept. 1998 Price: $3450 $6000 if bought in conjunction with #5555-26