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Smart Insights Reports

China Smart Card Market 2009

This new Smart Insights Report analyzes all market segments for the Chinese Smart Card Market:

• Mobile Communication: China hosts the largest mobile network operator by the number of subscribers, and is expected to pass the one billion subscribers bar by 2012,
• Payment, with 1.8 billion magstripe cards on the field ready to be converted to smart cards,
• Transport, with contactless card applications in every large Chinese city,
• Government ID, where the government has already equipped each Chinese citizen with a smart ID card, and is in the process of distributing healthcare cards,
• Mobile Payment services, with NFC trials under way to develop proximity mobile payments,
• Pay TV, with a digital TV market adding 2 million new users every month.
 
 

It includes qualitative and quantitative research covering all market segments.
 

And a detailed analysis about Chinese smart card vendors:

• Aerospace Golden Card
• Beijing Huahong IC Design
• Datang Microelectronics Technology
• Eastcompeace
• Huada Electronic Design
• Jiangsu Hengbao
• Shanghai Huahong Integrated Circuit
• Tongfang Microelectronic
• Watchdata
• Wuhan Tianyu Information Industry
• … and more …
 

This report (120 pages) provides answers to the following questions:
 

• What is the Chinese smart card market volume?
• What is the impact of the ongoing crisis on the Chinese smart card market?
• What is the impact of the telecom reshuffling on SIM cards demand?
• How do the different 3G networks affect mobile communication demand?
• How will mobile subscriptions and handset sales grow until 2013?
• How many mobile communication cards (SIM, UIM, USIM) will be shipped in 2013?
• What are the role and projects of China UnionPay?
• How will the 1.8 billion Chinese bank cards evolve towards smart cards?
• What is the evolution path between transport cards and electronic purses?
• What is the 2nd generation ID card?
• How will social security cards change the day-to-day life of more then a billion Chinese?
• What is the evolution of remote mobile payemt?
• And how will NFC pilots influence deployment?
• Who are the major Chinese smart card vendors?
• How do they develop their product roadmaps?
• What are their strategies?
 

If you need answers to these questions, … and a lot more… you need your copy of China Smart Card Market 2009, a just published Smart Insights Report.
 
 

“China Smart Card Market 2009”, a Smart Insights Report is a must for everyone interested in the smart card industry or in its markets: telecoms, payment, transport, government ID, mobile payment, pay TV and in the huge opportunity for development brought by the Chinese markets.

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Chinese smart card market has become one of the leading markets in the industry.

 

Since 1993, the Chinese government has established smart card projects as a priority under the “Golden Card Project” program. The government’s objective is to support the development of the smart card industry thanks to major projects, such as telecom development, national ID card, social security card, etc….

 

The leading market for the smart card industry is and will remain SIM cards. China Mobile is the largest mobile network operator worldwide by the number of subscribers. China Telecom and China Unicom also have sizeable market presence. Thus the Chinese SIM card market represents one of the most attractive in the world, along with one of the most competitive, as a growing number of domestic vendors compete with internationally recognized brands. Mobile phone penetration is still at an average level, so more growth is in sight. Moreover, the development of the third generation of mobile communication opens new highways for market growth. SIM card is to remain the main smart card application in volume for the Chinese smart card market, as subscriptions will soon pass the 1 billion mark in 2012.

 

With an increasing bancarization and financial inclusion of the population, China is one of the largest bank card markets in the world, with more than 1.8 billion magstripe cards already distributed. However, for the time being, smart cards have been used only as a subject of pilots and trials. People’s Bank of China and China UnionPay play a major role in the standardization and spread of banking cards. Options remain open whether China will engage in the way of EMV contact or contactless banking cards. When this development happens, it will have huge market implications for smart cards, terminals, and payment infrastructure market developments.

 

The Chinese government has launched several national identity projects. Distribution is under way to equip each Chinese citizen with and ID card. Then, with the launch of a national health insurance program, Chinese citizens are to be equipped with a healthcare card, which will bring a faster growth to this market.

 

Mobile payment services are already present in the day-to-day life of Chinese citizens. Extensive presence of mobile communication, along with the need for an improved payment infrastructure will lead to the convergence between mobile communication and payment with NFC (Near Field Communication) technology. Trials are already under way in Chongqing, as well as in other locations.

 

The transportation segment plays an essential role in the development of Chinese smart card markets. Following Hong Kong example, China main cities transport networks use smart cards as a means for payment, representing high volumes of contactless cards, for instance 50 million cards and tickets are in use in the City of Shanghai.

 

Education smart cards in high schools is considered as another great market segment in China. As its huge student base number develops rapidly, a more secure and easy way using smart card technology is needed to satisfy all their campus applications.

 

Founded in 2004, China’s payTV market has been increasing rapidly during the past few years. Covering more than 30 cities in China in 2009, the pay TV market is quickly developing from major cities to the medium and small-sized cities, which makes it one great potential segment of smart cards.

 

Thanks to these market developments on every market segment of the smart cards industry, and with a will to develop the Chinese industry, many Chinese smart card industrialists have appeared in recent years. They cover now all steps in the smart card value chain. Chinese smart card companies play a strong role on domestic markets and develop fast on foreign markets.  For the time being, as Chinese smart card industrialists are still struggling for international recognition, they conquer markets mainly in Asia, Middle East and Africa, where they play a growing role. 

1. Overview   11

2. Telecom   17

2.1 - Chinese mobile market profile, current situation and prospects 19

2.2 - China Mobile, China Unicom and China Telecom restructuring  22

2.2.1 Major telecom operators  22

2.2.2 2008 telecom industry restructuring  23

2.3 - 3G in China  25

2.3.1 3G licenses issues  26

2.3.2 Heavy investment in 3G  27

2.3.3 TD-SCDMA in the global market  28

2.4 - Handsets and smart phones 29

2.4.1 Xiaolingtong (PHS) goes to its end  29

2.4.2 Forecasts  30

2.5 -  Mobile communication cards 32

2.5.1 Forecasts  33

2.6 - IC telephone card  34

3. Payment  35

3.1 - Background  37

3.1.1 EMV standard and its implementations  37

3.1.2 China UnionPay  38

3.1.3 First IC bank card  40

3.1.4 Chinese cards spending habit  40

3.2 - Chinese banking industry and EMV migration  41

3.2.1 Global Drivers for EMV Migration  41

3.2.2 Migration strategies and Chinese EMV standard  41

3.2.3 Government support for EMV migration  42

3.2.4 Barriers to EMV migration in China  43

3.2.5 EMV migration market value  44

3.2.6 Impact on stake holders  45

3.2.7 EMV migration by 2011? 46

4. Transport  47

4.1 - Overview  49

4.1.1 Multi-application  49

4.1.2 Inter-city transport network  49

4.2 - Chips for major transport cards 49

4.2.1 ISO/IEC 14443 & ISO 15693  49

4.2.2 Volume and chip type of major card projects  51

4.2.3 Octopus cards in Hong kong  51

5. Government ID  53

5.1 - ID Card  55

5.1.1 1st generation  55

5.1.2 2nd generation  55

5.2 - Social security card  57

5.2.1 Companies awarded COS certificates  58

6. Mobile Payment Services  59

6.1 - Overview  61

6.2 - Remote mobile payment 61

6.2.1 UMPay  61

6.2.2 Alipay  62

6.2.3 99Bill 63

6.3 - Prepaid top-up  63

6.4 - Proximity payment: NFC  64

6.4.1 Introduction  64

6.4.2 Nokia’s NFC handset  64

6.4.3 Market Chances  64

6.4.4 NFC trials in China  65

7. Pay TV  67

7.1 - Market overview  69

7.2 - China Digital TV Holding  69

8. Education  71

8.1 - Market overview  73

8.2 - Synjones group  73

9. Smart card vendors  75

9.1 - Overview and top 10 smart card vendors in China  77

9.2 - Datang Microelectronics Technology  79

9.2.1 Profile  79

9.2.2 Smart card value chain positioning  80

9.2.3 Products  80

9.2.4 Research & development  82

9.3 - Eastcompeace  83

9.3.1 Company profile  83

9.3.2 Smart card value chain positioning  83

9.3.3 Products  84

9.4 - Huada Electronic Design  86

9.4.1 Company Profile  86

9.4.2 Smart card value chain positioning  86

9.4.3 Products  87

9.5 - Watchdata  89

9.5.1 Company profile  89

9.5.2 Smart card value chain positioning  89

9.5.3 Products  90

9.6 - WuhanTianyu Information Industry  91

9.6.1 Company profile  91

9.6.2 Smart card value chain positioning  92

9.6.3 Clients  92

9.6.4 Main Business  93

9.6.5 Products  93

9.6.6 Identity and Security Solutions  93

9.7 - Shanghai Huahong Integrated Circuit 95

9.7.1 Profile  95

9.7.2 Smart card value chain positioning  95

9.7.3 Clients  96

9.7.4 Products  96

9.8 - Beijing Huahong IC Design  98

9.8.1 Profile  98

9.8.2 Smart card value chain positioning  98

9.8.3 Clients  99

9.8.4 Products  99

9.9 - Jiangsu Hengbao (Hungbao) 100

9.9.1 Company profile  100

9.9.2 Smart card value chain positioning  100

9.9.3 Clients  101

9.9.4 Products  101

9.10 - Tongfang Microelectronic  102

9.10.1 Company profile  102

9.10.2 Smart card value chain positioning  102

9.10.3 Products  103

9.11 - Aerospace Golden Card (ASGCC) 104

9.11.1 Company profile  104

9.11.2 Smart card value chain positioning  104

9.11.3 Production capacity  105

9.11.4 Products  106

9.12 - Shanghai ChangFeng Smart Card  108

9.12.1 Company profile  108

9.12.2 Smart card value chain positioning  108

9.12.3 Major clients  109

9.12.4 Products  109

9.13 - Shandong Shanlv Electronic  110

9.13.1 Company profile  110

9.13.2 Smart card value chain positioning  110

9.13.3 Major Clients  111

9.13.4 Products  111

10. Glossary of terms  113

10.1 - Abbreviations 115

10.2 - Organizations 119

 

 

 

Table of figures

China smart card sales market volume 2004-2013 13
China smart card market by segments 15
Mobile subscriptions net additions in 2008 19
Subs penetration rate, 2008- 2013 20
ARPU 1996-2010 21
Telecommunication industry restructuring and 3G licenses 23
Restructuring among the major telecom operators 25
Chinese mobile operators connections, Q4/2008- Q4/2009 27
Handsets life expectancy in 2008 29
Mobile subs & handsets sales, 2008-2013 30
Growth rate comparison 31
Mobile communication cards market, Q4/2008 32
Mobile communication cards forecasts, 2008-2013 33
Mobile communication cards forecasts, 2008-2013, graphic 33
Global geographic coverage of China UnionPay in 2009 39
Chinese payment cards spending habits in 2008 40
Global transport cards by type 50
Volume and chip type of major transport card projects 51
Second generation ID cards manufacturers 56
Second generation ID cards 57
Companies awarded COS certificates of social security cards 58
NFC transaction volume forecasts 65
Smart card vendors market share, Q1/2008 77
Sales and annual production of the smart card vendors in China, 2008 78
Datang smart card value chain positioning 80
Datang smart card chips 81
Eastcompeace smart card value chain positioning 84
Eastcompeace smart card chips 85
Huada smart card value chain positioning 86
Huada smart card chips 87
Watchdata smart card value chain positioning 89
Watchdata smart card chips 1 90
Watchdata smart card chips 2 90
Wuhan Tianyu smart card value chain positioning 92
Wuhan Tianyu clients 92
Wuhan Tianyu smart card chips 93
Shanghai Huahong smart card value chain positioning 95
Shanghai Huahong smart card chips 1 96
Shanghai Huahong smart card chips 2 96
Shanghai Huahong smart card chips 3 96
Beijing Huahong smart card value chain positioning 98
Beijing Huahong smart card chips 1 99
Beijing Huahong smart card chips 2 99
Beijing Huahong smart card chips 3 99
Jiangsu Hengbao smart card value chain positioning 100
Jiangsu Hengbao smart card chips 101
Tongfang smart card value chain positioning 102
Tongfang Microelectronics smart card chips 103
Aerospace Golden Card smart card value chain positioning 104
Aerospace Golden Card smart card chips 106
Shanghai ChangFeng smart card value chain positioning 108
Shanghai ChangFeng micromodules 109
Shandong Shanlv smart card value chain positioning 110
Shandong Shanlv micromodules 111