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Industry crisis in sight? Or just industry maturation?

Week 38, 2006

Other industry players are not in a good situation either: Orga may become a collateral victim of the crisis that affects Safran group and specifically the Sagem handsets division (cf. Smart Insights #06-37). These poor results are due to price war in the mobile communication segment and delays in the banking segment. Of course, they also come from an intensified market competition, essentially due to the take-off of the Chinese smart card industry.

At the same time, there are many positive factors in the industry. This week is rich with two conferences: In-Club Contactless seminar and e-Smart Conference where the best-in-class in our industry come and exchange information, projects, perspectives, … Form these conferences, one can feel that the payment applications development has never been so active: EMV implementation is taking off, DDA cards bring large orders to the industry, and contactless payment is gaining momentum. At the same time, third generation mobile communication is finding its market after years of hesitation. And the identity segment has the strongest growth in the industry.

Positive signs come from the capital side too: the levels of investment in leaders in our industry show the confidence that is put into market development by investors. We also see creation of new companies either from scratch or as spin-offs of former ones. And mergers and acquisitions are going full speed.

Should we be alarmed by the facts or confident in our industry future? Maybe this is just a sign of maturity. An industry in which products reach a worldwide acceptance, margins are reducing, and product development is not as quick as before can definitely qualify as mature. The best sign of maturity is the internal convergence in our industry. We all remember a few years ago where market segments were easily identified and segmented, now, especially with NFC, telecom and payment are converging and their first application is transport.

So, let's trust in our industry, or, in other words, trust in ourselves.

Thierry SpanjaardChief EditorSmart Insights