- Smart Card Technology interview with Dr. Sean Xiang Gao, VP of Product and Marketing
Q: According a CCID consulting survey published in 2008, Watchdata was ranked as the third card manufacturer in the Chinese market with a market share of 10.5% (behind Eastcom and Datang). As we usually rank your company as the fifth worldwide card manufacturer (behind Gemalto, G&D, Oberthur and Sagem-Orga), how could we explain these positions? Could you comment on that and give us some insights about the histrory and current offerings of Wachtdata, and about the growth you mentionned (30%?)for last year - a recesssion period in the rest of the world ?
A: The survey ranking is easy to explain as CCID consulting only looks at the overall China market and not the global market data. Watchdata provides its products and solutions in more than 50 countries on several regions across the globe and business outside China accounts for about 40 percent of Watchdata’s total business.
Security and convenience are not just regional needs but also rather universal ones and with this regard, Watchdata continues to build its business around these needs. With an International HQ located in Singapore and 11 regional offices around the world, Watchdata continues to be more and more market oriented globally. This propels Watchdata ahead of its Chinese competitors and becomes a leading global smart card supplier. Watchdata overtook Eastcompeace in 2008 to become the fifth leading smart card vendor worldwide according to the following industry research.
Giesecke & Devrient
Source: Gartner (May 2009)
In 2001, Watchdata set up an office in Singapore and issued the first SIM card to Congo, marking its official presence in the international market. To date, Watchdata continues to be a major SIM card provider for Asia Pacific countries, a strong player in transportation, online banking and mobile payment with its expertise in RF & PKI technology and leading edge dual interface product offerings.
In 2009, Watchdata’s total smart card shipment reaches 282 million, which second to none in China. The driver behind this remarkable progress is our passion for innovation. In spite of the recession, new opportunities could be observed and applied before being ever noticed by others.
Watchdata’s long-term commitment to security and convenience in the digital world provides in depth understanding of customer’s need and unique capability to offer innovative and cost effective solutions that can be ready for commercial deployment within a short period. A few examples include:
1. On-line banking in China moves to PKI-based USB token solution to improve security. Watchdata was well positioned to secure major market share in China thanks to its persistent research and development on PKI technology.
2. Transit operators see the urgent need to migrate to open standard contactless microprocessor cards since the successful attack on pervasive memory card technology. Watchdata was able to react promptly to replace existing products in big cities, including Singapore, Shenzhen and Beijing.
3. More innovative products such as SIMpass™ mobile payment solution and user interactive USB tokens are in the pipeline to meet the call for improved user digital experiences.
Q: Watchdata has been awarded for the Asian Sesames for itsDBS Live Fresh credit card. Its a good example of convergence (EMV, payWave, ticketing and purse CEPAS) and innovation. Would you say theseconvergence and innovation are for you and your company key words showing both mega trends in the smart security industry and a way to differentiate from the others? Are innovation more related to R&D expenses or marketing one´s? Could you comment on what you previously said in Hong Kong about innovation that is not only a question of technology but also linked to customer adoption?
A: Convergence and innovation are the core strategies of Watchdata. Taking “portable, personal trusted computing equipment and environment” as the technical direction, Watchdata focuses on key fields including telecom, finance and transport to delve into multi-application integration and end user oriented solutions. Our innovation touches all levels, which means that it is more than just in customized and differentiated products and technologies, but in product management and marketing as well.
It takes tremendous effort to transform the features and differentiation of our products and solutions into real benefits for our customers. Oftentimes, we need to involve our customers in our innovation process to ensure the ease-of- use and seamless end user adoption.
Q: Have you any explanation to understand why there are more “convergence“ apps in Asia (Octopus app and Singapore apps seem emblematic!) than in the rest of the world? Since convergence relies upon agreements between different operators (banks, mass transit operators, MNOs, etc), could we say asian players are more easy or inventive with business models than the others?
A: I believe that each country is different and each has its own way of approaching technology and innovation. Converged applications are indeed influenced by several factors, for example, the legislation environment, the complication of technical specifications, the will and attitude towards achieving business model agreement and ultimately the user’s perception of convergence. Converged applications appear earlier in Asia probably because of the large population and fast-paced environment in daily life. Asian people seems to be more open adopting converged solutions, given the convenience it brings to them when on the go.
Q: NFC is a good convergence-enabler. How do you see ambitious Chinese (China Mobile, Unicom, etc.) projects taking off? And when? Do you think Chinese handsets manufacturers are palying in this field a major role by providing quickly NFC phones? How do you see your SIMpass solution adopted in the Chinese market? In the worldwide market?
A: In China, mobile payment is becoming a killer application for the top three Mobile Network Operators (MNOs) when the 3G era officially started in 2009. So far, all of them have already launched NFC mobile payment projects in several areas of China. However, mobile payment is more SIM-centric, rather than a "pure" NFC phone solution. Mobile payment services in China are more driven by MNOs than by the handset vendors. Handset vendors, however, still have many opportunities when playing in line with MNO´s plan for mobile payment.
SIMpass™ is rapidly growing in China as one alternative in implementing NFC technology. Using mature standard, minor customization on handsets, ease of product-form adoption explain why SIMpass™ is successful in China market. Any player in the chain can implement dual-interface technology easily without large investment.
Compared to Single Wire Protocol (SWP) enabled handset, SIMpass™ enabled handsets looks to be more attractive to handset vendor as it is easier to manufacture and deploy. In the future, we believed that that dual-interface card enabled handset will be the major trend in the China market. On the other hand, SIMpass™ solution is ready to support NFC phones as the market adoption becomes mature.
SIMpass™ drives quite a few projects in China Telecom, China Unicom and China Mobile. A promising future is sure to come for SIMpass™. In the international market, SIMpass™ is also open to commercial deployment as a bridge to NFC.
Q: You said convenience and security (or trust?) are strongly linked as someone usually says security is often a constraint. Could comment on that?
A: As information and internet technology develop, people’s lifestyle is made more convenient, but is also faces more threats. I rather view security as an enabler. For example, more and more people communicate with each other via internet instead of face-to-face, far beyond the limits of time and space. Secure authentication is in place to make sure they are talking to the right person. Otherwise, their private information could be stolen or even maliciously used.
As society gradually steps into a cashless age, the service providers (and operators), like in telecom, finance and transport, need to build billing mechanisms, access control and authorization capabilities to control access to the services and secure their income. Service-users need a mobile device and environment which can support the above capabilities, and which they can trust to enjoy all the services.
Authentication and data protection become crucial for the whole ecosystem. If the convenience is not secured by a sound mechanism, then the convenience could only be a short-term one. For any long-term real convenience, security should be an absolute foundation.
Q: What are for you the main trends in 2010-2015 in the smart security industry?
A: The overall economic situation is getting better against the downturn. We can predict that new technology, new modes and even new lifestyles will be developed. The world will mainly focus on modernization, urbanization, education, information and sanitation. Related technologies such as information, clean fuel, life science and medical security will grow and eventually adopted. Among them, applications including M2M, cloud computing, public utility network, healthcare and life-long medical record, are now gaining a momentum. Smart security industry will embrace more opportunities based on the trends mentioned above.