2017: transformation and maturity

December 28, 2017

 

While 2017 has seen the end of Smart Insights Weekly and our transformation in to a new business positioning, it has also been a transformative year for the secure transactions industry we keep on analyzing.

 

2017 will remain as a revolutionary year for the secure transactions industry itself! After years of status quo with four leading players and Gemalto as the undisputed leader, we have seen this year the merger of Oberthur and Morpho to create Idemia and the start of the acquisition process of Gemalto by Thales. The secure transactions industry as such is becoming a branch of the cyber security industry, a move triggered by the anticipated slowdown in demand of SIM cards and EMV cards. As a consequence, the secure transactions industry perimeter is becoming harder to define, and Eurosmart will have to redefine its industry statistics perimeter.

 

Maturity in an industry can be shown from several parameters. In some cases, maturity is reached when the share of R&D in a product cost is reducing, and the competition focuses on production cost rather than technology differentiation. This situation is exemplified by the disposable SIM market, in which after years of price wars, there is now little room for R&D investment.

 

Maturity is also reached when a technology meets enough adoption not to be talked about. Our industry started to develop and market NFC more than ten years ago. It is now adopted in a large number of smartphones, and no longer an essential selling point. A consequence is that companies that made NFC their focus are at risk of losing their identity as their technology is no longer in focus.

 

In the transport ticketing segment, the magstripe technology has passed its maturity and entered obsolescence in 2017 when two major networks, New York and Paris, announced they are finally switching to contactless, NFC and account-based payment.

 

eID is not yet mature as new developments are announced on a permanent basis, that combine online, biometrics and all types of security features.

 

Blockchain is a technology that’s far from being mature. Besides Bitcoin, it is still in the “high promises, little reality” period as no wide scale implementation has been demonstrated yet. Bitcoin, on the other hand, is taken for a rollercoaster ride…

 

2017 has unexpectedly transformed our industry, probably for a better adaptation to the future.

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