1. Impacts of a Changing Value Chain Impacts of a Changing Value Chain Interactive Analyst Briefing Anoop Ubhey 16th April 2003

2. EU Gene Therapy10th Dec 2002 Agenda The Old Value Chain The ‘New Entrants’ The Potential Changes and Impact on Players Questions and Answers

3. EU Gene Therapy10th Dec 2002 Market Overview The Old Value Chain Silicon Vendors Smart Card Vendors Card Issuers Power Push Ideal Situation for Smart Card Manufacturers

4. EU Gene Therapy10th Dec 2002 Market Overview The Old Value Chain - Vendors Want to Move Silicon Vendors Smart Card Vendors Card Issuers Power Push 2 years ago - Smart Card Manufacturers Looked to Move up the Value Chain

5. EU Gene Therapy10th Dec 2002 Market Overview The Old Value Chain - Vendors Want to Move Silicon Vendors Smart Card Vendors Card Issuers Power Push Commodity Markets - Something Needs to be Done

6. EU Gene Therapy10th Dec 2002 Market Overview A Fuller Look at the Value Chain Card Issuers Software Houses - SCMS Terminal Vendors System Integrators Smart Card Man’fers Silicon Vendors Other

7. EU Gene Therapy10th Dec 2002 Market Overview New Addition - ‘New Entrants’ Card Issuers Software Houses - SCMS Terminal Vendors System Integrators Smart Card Man’fers Silicon Vendors ‘New Entrants’

8. EU Gene Therapy10th Dec 2002 Market Overview ‘ New Entrants’ - Who are they? Software Houses such as: Aspects Software IBM Trusted Logic DataCard Goldkey etc

9. EU Gene Therapy10th Dec 2002 Market Overview Software Houses Terminal Vendors System Integrators Card Issuers Smart Card Man’fers Silicon Vendors New Entrants SCM Tier 2 SCM Tier 3 SCM Tier 4 Scenario 1

10. EU Gene Therapy10th Dec 2002 Market Overview Software Houses Terminal Vendors System Integrators Card Issuers Silicon Vendors Smart Card Man’fers New Entrants Scenario 2

11. EU Gene Therapy10th Dec 2002 Market Overview New Entrants Card Issuers Silicon Vendors Smart Card Vendors Smart Card Manufacturers Can Be Squeezed of Their Market Power

12. EU Gene Therapy10th Dec 2002 Summary In theory the changes in the value chain can have a dramatic impact on all members of the chain Smart card manufacturers are also looking to move up the value chain The value chain is fragmenting Smart card manufacturers are losing power New entrants such as Aspects Software, Datacard, IBM, Trusted Logic and Goldkey have entered the market and are creating quite a stir. Is the lack of interoperability in the market enough for them to tackle the demands and requirements of their customer’s customer?

13. EU Gene Therapy10th Dec 2002 Summary How can they keep their customers happy as well as offer this new product to provide themselves with the value and revenue they demand Semiconductor vendors are coming to a crossroads of how to deal with this new product - do they compete with their customers or don’t they? Beware of consolidation - even in related markets How much of a risk are semiconductor vendors willing to take?

14. EU Gene Therapy10th Dec 2002 Any Questions? For more information call: +44 (0)20 7343 8383 email: enquiries@frost.com www.smartcards.frost.com