ABI Research predicts that 5.4 billion SIM cards will ship during 2015 marking a modest YoY growth rate of 4.1%. The days of double-digit shipment growth for SIM cards are over and declining ASPs have forced smart card and IC vendors to change strategies. Vendor focus is now moving away from market share gains and up the value chain. This movement is driven by higher value product propositions such as SWP and LTE SIMs with the aim of maintaining reasonable revenue growth.
The transition from 2G to 3G and on to 4G is creating one of the bright spots contrasting against the gradual decline of SIM card ASPs. All of the top smart card vendors including Gemalto, Giesecke & Devrient, Oberthur Technologies, and Morpho are chasing these more lucrative segments. Not all regions are experiencing an easy transition from lower to high-end air technologies. Research Analyst Dimitrios Pavlakis comments: “Europe, North America, and certain parts of Asia-Pacific are enjoying a smooth transition to LTE technology, primarily attributed to significant network infrastructure investments and governmental regulations. However, other regions including Latin America and India, are currently in a state where expansion of connectivity and network upgrades are challenging, hindering growth for adoption of faster air interface technologies and delaying future LTE rollouts.”
Another 2014 market highlight was the healthy 95% YoY increase in SWP (Single Wire Protocol) SIM card shipments. Despite the positive growth rate, the market has yet to reach its full potential. The majority of shipment growth is localized in the North American and Asia-Pacific regions, both accounting for 75% of all SWP shipments in 2014. This scenario will likely change as MNOs look to control a competitive mobile payment platform to rival OEMs and other vendors such as Apple, Samsung, PayPal, and Google which continue to battle for market share and territory.
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