The merger of Gemplus and Axalto to create smart-card market leader Gemalto has proved a resounding success for its main rival Oberthur Card Systems. First-quarter figures from Gemalto show that compared with the performance of the two separate companies a year ago, revenue fell 7% to 362.1m euros ($492.4m). By contrast, Oberthur said that first-quarter sales rose 12.3% to 133.8m euros ($181.9m).
Gemplus and Axalto merged in June 2006, but a share price of 25 euros ($33.99) at the time of the merger is now 18 euros ($24.47) as doubts have grown about the future of the company. The problem is that anyone buying hardware needs a second source to ensure competition and continuity of supplies. With the merger Gemalto removed one second source from the market and increased the amount of business available to Oberthur.
Mobile Communications is Gemalto’s biggest business, and first-quarter revenue fell 16% to194m euros ($263.8m) with the average SIM card selling price down by 19% on last year’s level with a high portion of shipments going to emerging countries. Revenue for the year is expected to be flat though the company is looking for an improvement in second-half margins.