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					                                                     Table of Contents
Latin American Smart Card Spotlight                                              •   Latin American Smart Card Markets:
                                                                                     Market Coverage
                                                                                 •   What is going on in the market? Market
                                                                                     Overview
                                                                                 •   Market Drivers
                                                                                 •   Market Restraints
         Presentation prepared for:                                              •   Unit and Revenue Forecasts
                                                                                 •   Market & Technology Trends
                                                                                 •   Vertical Market Development
                                                                                 •   Growth Implications
                                                                                 •   Challenges & Strategies
                                                                                 •   Major industry Participants
                                      May 14, 2008
                                                                                 •   Contact Information

                                                          Latin American
                                                     Smart Card Spotlight 2008                                                2




                                                                                                                                  1
Latin American Smart Card Industry                                               Latin American Smart Card Industry
Market Coverage                                                                  Market Overview

                                                                                   SIM cards continue to drive healthy growth
                                                                       SIM
                            Microcontroller                                      rates globally, especially Latin America.


                                                         Retail Loyalty            Highly competitive, price oriented markets.
                                                           & Payment
         Memory                                                                    Progressive adoption of chip enabled EMV
                                              Government ID & Others             migration by main banks in Brazil and Mexico.


                                                                                   Large inroads of contactless technology in
                             Public Transport                                    the transit segments and just beginning in the
                                                                                 payment markets.

           Corporate
            Security                                                             Increasing market penetration of the microcontroller card markets since 2004.


     Latin American                                                                   Latin American
Smart Card Spotlight 2008                                                    3   Smart Card Spotlight 2008                                                   4




                                                                                                                                                                 2
What is going on in the market?
Market Overview
                                                                                                               Market Drivers

                                                              Central America & Caribbean
                                                        Isolated pilots at emerging application segments                 High
                                                       such as electronic identification in El Salvador and
                                                            Puerto Rico, and contactless payment in                                                        3G development & NFC
                                                                            Guatemala.
          Mexico
 2nd largest market in the                                                              Brazil
region leading the payment
                                                                               The largest market in the
    and the government                                                                                                                                Highly Competitive Banking Segment
                                                                                region strengthens its
segments in 2006 and 2007.
                                                                                  focus on the multi-
                                                                                application segments
                                                                                such as payment and                                                         Public Transport
                                                                                        transit.                                                                          Government Projects
                   Andean Countries
        Increased overall perception on security                                                                                                       Contactless Payment Pilots
           strenghenth smart card industry’s                                     Southern Cone
        opportunities for electronic identification              Argentina’s developed GSM market and
                and payment solutions.                          Chile’s mature financial market segments
                                                                present the highest opportunities for the
                                                                          smart card industry.                             Low

                                                                                                                                  2007                  Short Term                Medium Term   Long Term
                  Increasing awareness of the benefits of smart card technology.

      Latin American                                                                                                Latin American Diameter Indicates Segment’s 2004 Unit Size.
                                                                                                                     Note: Bubble
 Smart Card Spotlight 2008                                                                                 5   Smart Card Spotlight 2008                                                                    6




                                                                                                                                                                                                                3
Market Restraints                                                                                Unit & Revenue Forecast

          High
                                            High Initial Investments                                                         Units and Revenues Percentage Split
                                                                                                                     100,0%
                            Mobile Saturation slightly reduces Growth Rates
                                                                                                                       80,0%




                                                                                                   Participation
                                                                                                   Percentage
                                            Strong Price Pressure                                                                                                             Microcontroller
                                                                                                                       60,0%                                                  Memory IC
                            Lack of Awareness and Confidence
                                                                                                                       40,0%                                                        Units
                                                                                                                                                                                    Revenues
                                                                                                                       20,0%
                                Decreasing Payphone Cards
                                                                                                                        0,0%
                                                                                                                                  2004   2006     2008    2010     2012



            Low

                   2007                  Short Term                Medium Term   Long Term
                                                                                                                   Revenue 2006
                                                                                                             $ 387.2 million             +      CAGR (2006-2012)
                                                                                                                                                 12.3 percent       =     Revenue 2012 (Forecasted)
                                                                                                                                                                              $ 775.4 million



     Latin American Diameter Indicates Segment’s 2004 Unit Size.
      Note: Bubble                                                                                    Latin American
Smart Card Spotlight 2008                                                                    7   Smart Card Spotlight 2008                                                                            8




                                                                                                                                                                                                          4
Technology Trends                                          Vertical Markets’ Development (Revenues)


                                                            100%                                                                                                            2006
                                SIM                                                                                                                                         2012




                                                                Relative Market Share
                                             Java                                                                                SIM
  ISO/IEC 7816-3

                               EMV
                                             Multos

                             Proprietary
                            Technologies                                                         EMV        EMV     MIFARE
                                             Closed                                     GOV                                                               Ph
 ISO/IEC 14443-4
                                           Operating
                                           Systems
                                                                                                                        Market Maturity                              100%
                              MIFARE
                                                                                        SIM Cards                                            Government ID’s and others (GOV)
                                                                                                                             Payphone (Ph)
                                                                                        Financial (banking & payment)                        Transit & Corporate Security


     Latin American                                             Latin American
Smart Card Spotlight 2008                              9   Smart Card Spotlight 2008                                                                                               10




                                                                                                                                                                                        5
Business Opportunities                                                                                                                   Growth Implications

                                  Microcontrollers accounted for over 75% of the total
                                  smart card revenues in 2007.                                                                             The need for increased security offers new opportunities
      Present Market Conditions




                                  The SIM would continue to dominate the smart card
                                                                                                                                         for the smart card industry across all application segments,




                                                                                                         Future Market Conditions
                                  shipments in the short, medium and long terms.                                                         and significantly at critical Government areas.

                                  Banking and payment contact chip enabled cards under EMV
                                  protocol expands beyond Brazil and Mexico.
                                                                                                                                           Retail loyalty, and closed user group corporate segments
                                  Inexpensive MIFARE cards increase penetration at key public                                            for online and offline transactions would be other critical
                                  transport systems adding e-purse and other functionalities.
                                                                                                                                         segments to drive growth.
                                  Student ID’s, drivers licensees and vehicle registration projects to
                                  demand millions of low cost contactless smart cards.
                                                                                                                                           Open Operative Systems drives investments in the long
                                  Price pressure drives offer of low end smart cards and value-                                          term.
                                  added services development.



     Latin American                                                                                                                           Latin American
Smart Card Spotlight 2008                                                                                                           11   Smart Card Spotlight 2008                                      12




                                                                                                                                                                                                             6
Challenges & Strategies                                                       Major Industry Participants

                                                                               •   Gemalto                  There has been some consolidation in
                              Higher Penetration Through                                                    the market (i.e. Daruma Orga became
                            Smart Cards’ Flexibility at Low Cost               •   Gieseck & Devrient       Sagem Orga; Gemplus acquired CSM,
                                                                                                            and merged with Axalto; Assa Abbloy
                                                                               •   Sagem Orga               Identification Technologies Group – ITG
                                                                                                            acquired Novacard do Brasil and merged
                                                                               •   Oberthur Card Systems    with HID Global).
             • Identify value-added products and services for                  •   Incard do Brasil         We expect to see more consolidation in
             addressing a dual market demand                                                                the coming years as the value chain
                                                                               •   ABNote                   begins to shift.
             • Develop multi-application smart cards for achieving
             penetration at lower cost                                         •   CPI
             • Build partnerships, and alliances for future prosperity
                                                                               •   Inteligensa-Intelcav
                                                                               •   Sonsun
                      Value-Added Applications & Services
                                                                               •   HID Global - ITG
     Latin American
Smart Card Spotlight 2008                                                13                                                                           14




                                                                                                                                                           7
Contact Information




      Alejandra Etcharran
        José María Jantus               José María Jantus
                                      José María Jantus
      Industry Analyst
        Corporate Communications        Corporate Communications
                                      Corporate Communications
      The Americas
        Latin America                   Latin America
                                      Latin America
      Information & Communications
        Jose.jantus@frost.com           Jose.jantus@frost.com
                                      Ph.: +54 11 4777 9951
      Technologies
        54-11-47779951                  54-11-47779951
                                      Mobile: +54 9 11 5863 7571
      Ph: +54 11 4777 0368
                                      Jose.jantus@frost.com
      Alejandra.etcharran@frost.com




                                                Thank you!



     Latin American
Smart Card Spotlight 2008                                          15




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