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Mr. Paul Beverly
Executive Vice-President, Marketing
President North America
Gemalto, Inc.
www.gemalto.com
Paris: GTO.PA

SecuritySolutionsWatch.com: Thank you for joining us today, Paul. Please give us an overview of your background and your role at Gemalto.

Paul Beverly: I joined what is now Gemalto in 1985 as a marketing manager. My experiences and career here is evidence of one of the things that makes Gemalto a great place to work: its international scope and culture of promotion from within. I have been responsible for general management, marketing, operations, sales and corporate strategy roles around the world.

Today as the president of North America, I am responsible for identifying the best business opportunities and ensuring that Gemalto is well-positioned to serve and deliver for our customers. In my role as EVP of Marketing, I oversee all aspects of marketing, including planning, positioning, segmentation, branding, customer satisfaction and communication activities to boost understanding of our company and solutions worldwide. We are in a very exciting industry, and an important part of this role is making sure we are listening to our customers. Gemalto has a highly developed, customer-focused strategy. In order to capitalize on the many great opportunities they bring us, one of my most important roles is to manage a best-in-class feedback program to identify and prioritize the needs of our diverse customer base.

SecuritySolutionsWatch.com:Please give us an overview of Gemalto's business, target markets and solutions.

Paul Beverly: Gemalto has grown to become a $2.71 billion (€1.9 billion) global leader in digital security. The business units that serve our primary markets are Mobile Communications, Machine-to-Machine (M2M), Security, and Secure Transactions during the last 24 months.

Our Mobile Communications segment represents just over half of our revenue. More than 450 mobile network operators (MNOs) worldwide benefit from our software, OTA server platforms and related services. Growth is coming from promising developments such as new form factors in mobile payment and customer wins in client-server software and services. An example is helping wireless MNOs provision and load applications onto mobile phones so the handset becomes a mobile wallet. We also help MNOs expand their services onto the Internet giving users the ability to protect, organize and share data securely. Some 1.8 billion mobile subscribers rely on at least one of our solutions. In North America in particular our platforms and devices are helping MNOs deploy new services using ultra-high speed data speed and IP connectivity associated with the rollout of new 4G networks.

In June 2010, Gemalto acquired Cinterion Wireless Modules GmbH (CWM), making M2M one of our primary business units. Cinterion is the leading provider of industrial M2M wireless communication modules. Now Gemalto is the leading supplier of M2M devices and solutions based on HSPA, UMTS, EDGE, GPRS and GSM technologies. M2M is a rapidly growing new business within Gemalto's business portfolio.

This growing technology is used within all sorts of applications, including automotive, health monitoring, power grid management and many others. An innovative use case is that of Deutsche Telekom embedding all BMW vehicles with Gemalto's eCall solution, an automatic emergency call system which is triggered when crash sensors detect that a vehicle has been involved in an accident. The system directly links with the BMW call center platform and provides all detailed information about the accident. Even insurance companies have adopted M2M technology to offer new policies to their clients and to differentiate in a tough competitor environment. Based on the real driving style and behavior in traffic, the insurance telematics system is able to calculate the current monthly insurance rate based on the risk level. Another example of M2M technologies is the way in which TZ Medical is improving lives and saving time and money for patients and healthcare providers with its new Cinterion enabled Aera CT(TM). This device is a lightweight, cost effective mHealth heart arrhythmia monitoring device. And, when it comes to energy consumption, M2M is the technology within smart meters, which gives consumers the ability to track up-to-the-minute consumption data via the Internet and change energy habits to save money and resources.

As I'm sure you can see from these examples, M2M communication is growing tremendously and offers a wide range of benefits for consumers and enterprises alike.

The Secure Transactions team oversees business activity in banking, which includes credit/debit cards and services, transport and Pay TV; as well as Near Field Communications (NFC) and the Trusted Service Manager (TSM) function when it comes to mobile banking and payments. It is our second largest business line. Growth is driven by global migration to EMV (EuroPay, MasterCard, Visa: the industry standard for international debit/credit cards) and dual-interface contactless products. We expect to see this continue into 2011.

Gemalto subscribed to a capital increase in Serverside Group a few months ago. Serverside is best known for its payment card design technology, AllAboutMe™, which enables personal images and photos to be uploaded onto payment cards via a web interface and then be processed by the participating banks' supply chain. Capital One has taken advantage of service with its Image Card. Customized cards deliver robust ROI to card issuers by creating a personal bond between the consumer and the card. This bond translates into increased usage, with both the number of transactions and average overall spend increasing.

The Security business includes identity products, services and solutions for governments and enterprises. Our clients include many Fortune 500 companies such as Boeing, Chevron, HP, Shell, Microsoft, the Government Printing Office and the United States Department of Defense. At present we supply more than 30 nations with ePassports and highly secure personal national or healthcare identity cards.

Gemalto is giving Amazon Web Services (AWS) users a secure way to access their accounts
with the Ezio Time Token, a small, lightweight, long-lasting device that provides a unique six digit one-time password (OTP). This is a significant reference for Gemalto's strong multi-factor authentication solutions since AWS is the leading cloud computing service provider. AWS provides highly scalable computing infrastructure that enables organizations around the world to requisition compute power, storage and other application services in the cloud on demand.

At the start of 2010 we took a controlling stake in Netsize to help expand its mobile commerce and mobile marketing platform. This makes Gemalto a key player in mobile application sales and rounds out the services we provide to operators to bolster their subscriber revenues. Soon after, we acquired Valimo, the world leader in mobile PKI authentication, aiming at growing usage of legally-binding mobile digital signature. In April we acquired Todos, making us the only truly global eBanking vendor with such a comprehensive range of authentication solutions for Internet banking and eCommerce.

SecuritySolutionsWatch.com:You mentioned digital security. How does Gemalto differ from other IT security companies?

Paul Beverly: Many companies are involved in securing networks and information systems. Gemalto's unique position is that we are about securing the individual "accessee." For us, digital security means putting security in the hands of people to give them the freedom to enjoy their digital lifestyle. Our vision is that in an increasingly connected society, Gemalto will be the leader in making personal digital interactions secure and easy.

As proof of that statement, already one out of every three people in the world uses a digital security product from Gemalto. Because of this immense install base we can operate these solutions and remotely manage the software and confidential data contained in the secure devices to help our customers refresh the applications they offer their end user customers.

SecuritySolutionsWatch.com: Gemalto's digital security business crosses many different sectors. How well are you doing?

Paul Beverly: Although we cross many sectors, all of our solutions and services share a commonality of making digital transactions easy, convenient and secure for the end user: the consumer. We are doing well - revenue for the latest full year 2010 was up by 19 percent, and we had double-digit growth in all four primary segments of our business.

Our goal in any market we enter is to be the leader. Being the leader gives way to the ability to recruit the best talent and serve the top clients anywhere in the world. Many stakeholders also tell us they find it preferable to invest in companies that are the leaders in their business sectors. This is a standard for which we strive.

SecuritySolutionsWatch.com: What core competencies enable you to be the market leader in all these diverse markets?

Paul Beverly: Our core competencies are security expertise, the design and production of secure hardware and software, secure remote management and personalization & issuance. These capabilities cut across all sectors.

Above all, our priority is our customer, and everything we do flows from that commitment. Gemalto strives to be engaged during every stage of the relationship, providing new information and interaction through social media outlets such as twitter (@Gemalto_NA), LinkedIn, facebook (Digital Security) and the Gemalto blog. We strive to offer customers, as well as the end-user, the most up-to-date information on digital security and how it affects their daily lives.

We have deep expertise in cryptography, secure operating system and software development. We build our secure personal devices on a microprocessor smart card core and deliver them as cards, SIMs, tokens, passports or hardened modules for embedded M2M applications. We locate our production and personalization close to our customers worldwide to provide better service, and each location has multiple security certifications.

These capabilities are at the heart of Gemalto. They are very difficult to imitate, which gives us true competitive advantage and differentiation. No other organization has such a significant market leadership presence in so many different digital security sectors.

SecuritySolutionsWatch.com: Thanks again for joining us today, Paul, are there any other subjects you'd like to discuss?

Paul Beverly: The reason for our ongoing success is that Gemalto is at the heart of our evolving digital society. Every aspect of our lives - jobs, family, social activity and entertainment - has a digital component, and this trend will only expand. People need to know that this world is still a safe place in the digital age. Gemalto is here to give people the freedom and convenience to enjoy the immense benefits of the digital world in which we live.

We continue to add new products and grow geographically, and market trends are favorable to continued growth. In mobile communications, the acquisition of Cinterion has quickly made us the leader in the growing M2M market. We are a key player in the 4G mobile broadband generation known as Long Term Evolution (LTE), giving us more opportunities for software and services in Mobile Communications. And, the world's migration of chip cards for banking allows us the opportunity to provide better security when people bank. Lastly, government programs are going to continue to move into a digital era, and we will be on hand to provide secure identity cards, software and issuance services to propel this forward.

These factors all put us in an excellent position going forward. I encourage your readers to visit www.gemalto.com/investors for more information about Gemalto.