Gemplus Tops Analyst’s Smart Card Analysis For Fourth Time in Five Years

LONDON, July 17 /PRNewswire-FirstCall/–Frost & Sullivan, the international marketing consulting company, today announced that Gemplus (Nasdaq: GEMP; Euronext: Sicovam 5768) has been awarded Frost & Sullivan’s Market Value Leadership Award for its exceptional performance in the smart card market.

The year 2001 was a harsh one for most smart card manufacturers with initial optimism dissipating as early as in the second quarter. This was reflected most acutely in the striking downturn of the GSM SIM card market–the largest application segment for most smart card companies and a market where Gemplus is a prominent player.

Displaying a keen grasp of market realities, Gemplus immediately mounted a strong comeback. The company’s efforts were targeted at value enhancement, realized through a strategic re-orientation coupled with operational rationalization. Such timely and flexible responses allowed Gemplus to reinforce its number one position globally in the context of both unit shipments and revenue. Gemplus maintained the lead in unit shipments of smart cards, accounting for a phenomenal 33.6 per cent of the market in 2001. The award recipient turned in an equally convincing performance in revenue terms, claiming a remarkable 27.8 per cent of the overall market.

“A change in market strategy allowed Gemplus to leverage its core capabilities and move away from being only a smart card manufacturer. The company further achieved and consolidated its market value leader position through much-needed internal restructuring and a more defined business market focus,” explains Anoop Ubhey, Industry Analyst at Frost & Sullivan.

The award recipient’s ability to recognize and adapt to changing trends was further highlighted by its tactical solutions for EMV migration, the major driver in financial markets. Gemplus is currently working in tandem with its customers on their EMV migration and pushing smart card uptake across Europe, Asia Pacific and Latin America. Driven by exceptional growth rates in 2001, in particular with the uptake of multi-application smart cards in the US, Gemplus has been catapulted to the number three spot in terms of smart card suppliers to the banking arena.

In addition, growing prominence of the Geldkarte project in Germany will provide Gemplus with further impetus to grow their business in this sector. Integral to these achievements was Gemplus’ concerted focus on building strong relations with its customers. This was underpinned by Gemplus’ emphasis on offering bespoke solutions, thereby adding real value to the company-client interaction.

“For instance, taking into account the difficulties mobile operators were experiencing last year, Gemplus adopted the strategy of helping their customers overcome these hurdles. Indeed, by relying heavily on sophisticated cards and application support, Gemplus was able to move further ahead of its nearest rival–SchlumbergerSema–in terms of market value. We believe that this is one of the key success factors that will enable Gemplus to continue to innovate in the market and help operators realize the full security and CRM benefits that smart cards provide,” comments Mr. Ubhey.

According to Frost & Sullivan, the outlook for 2002 for the global smart card market is considerably brighter and the total smart card market is forecast to grow from $1.76 billion in 2001 to $2.41 billion in 2004. A very encouraging trend is the expanding application of smart cards in the financial sector against a backdrop of EMV migration and a growing interest in smart cards as an ID security application, especially post September 11, which will also help smart card providers develop new market opportunities.

To choose the recipient of this award, Frost & Sullivan analysts tracked changes in global sales and market share, as well as rate of expansion into new geographic markets, of the world’s leading smart card manufacturers. Through extensive interviews and secondary research of proprietary data sources, Frost & Sullivan compared all manufacturers in the smart cards field and determined that Gemplus has unequivocally maintained its leading position in the overall market despite growing players within this market.

In recognition of its preeminent position both in terms of number of cards shipped and market value as well as its understanding of global market and customer dynamics, Frost & Sullivan presents the Market Engineering Value Leadership Award for the Smart Cards Market to Gemplus.

About Frost & Sullivan

Frost & Sullivan, a global leader in international strategic market consulting and training, bestows Market Engineering Awards to companies demonstrating exceptional market share leadership skills in the increasingly competitive marketplace.

Frost & Sullivan rigorously analyses specific criteria to determine Market Engineering Award recipients in a variety of regional and global market landscapes. Founded in 1961, Frost & Sullivan is headquartered in San Jose, California, with offices located worldwide. For further information, visit http://www.frost.com.

About Gemplus: the world’s leading provider of smart card solutions

Gemplus helps its clients offer an exceptional range of portable, personalized solutions that bring security and convenience to people’s lives. These include mobile Internet access, inter-operable banking facilities, e- commerce and a wealth of other applications.

Gemplus is the only completely dedicated, truly global player in the Smart Card industry, with the largest R&D team, unrivalled experience, and an outstanding track record of technological innovation.

Gemplus trades its shares on Euronext Paris S.A. First Market and on the NASDAQ Stock Market as GEMP in the form of ADSs. Its revenue in 2001 was 1.0 billion Euros.

Gemplus: Beyond Smart

http://www.gemplus.com

Gemplus and the Gemplus logo are trademarks and service marks of Gemplus S.A. and are registered in certain countries. All other trademarks and service marks, whether registered or not in specific countries, are the property of their respective owner. .

For more information:

Gemplus
Kerry Butler
Phone: +1 215 390 2840
Email: kerry.butler@gemplus.com

Edelman Public Relations Worldwide
Alicia Jones
Phone: +1 323 202 1047
Email: Alicia.jones@edelman.com