De La Rue International Plc, the UK banknote printer which has been developing its own smartcard division, may be moving back to banknotes. Press reports suggest that it is negotiating to sell its Card Systems arm. Meanwhile, Groupe Bull is thought to be looking for a partner for its smartcard business, but hasn’t commented on reports that it might buy the De La Rue business.
Commenting on the De La Ru rumors, Clive Longbottom, strategy analyst with Strategy Partners, says it wouldn’t surprise me. The technology’s changing too fast and there’s too many players out there. The costs of smartcards means there’s no real money in it, he argues. Consumers are unsure about the confusion over standards and platforms and unwilling to invest, argues Longbottom. The only markets where smartcards are really exploding are in France and Belgium. De La Rue may just have made that realization and decided to sell while the price is still high and the market still exists. De La Rue makes $1.1bn revenue, with smartcards contributing around one third of the card wing’s $250m. For its part, De La Rue would only say it is exploring all options for the future of its Card Systems division.
The two other major players in smartcards – Gemplus SA and Schlumberger Ltd – are also European. But there are signs that the technology is beginning to take off elsewhere. In 1998, Bull Smart Cards & Terminals earned revenues of $210m, and claims to have made 80% of its revenue outside France. In its first quarter, revenue from smartcards reached $46.5m, up 46% from the $31.8m revenue it made it the same quarter last year.
