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Gemalto shares drop after Apple unveils SIM card

PARIS (Reuters) - Shares in Franco-Dutch technology firm Gemalto tumbled 10 percent after Apple unveiled a new SIM card for its latest iPads, sparking worries over the future of Gemalto's own smart chips for mobile phones. Apple said this week its new iPad Air 2 would let subscribers switch wireless carriers much more easily by swiping an icon across the screen - thanks to a neutral Apple SIM card installed in the device. "This is a big blow to Gemalto's technology," a Luxemburg-based trader said. Gemalto, a major provider of chip cards and payment terminals, last year drew around 400 million euros (£318.93 million) of revenue from handling payments for third parties. By working directly with Visa and MasterCard to handle mobile payments, Apple may squeeze Gemalto out of revenue from installing chips and managing payments in what is seen a fast-growing market for mobile transactions, analysts said. "We conclude the implications of (Apple Pay) are largely negative for Gemalto," Morgan Stanley analysts wrote in a research note written before this week's announcement on Apple's SIM card plans. "Visa and MasterCard acting as service providers shrinks the potential revenue pool." Gemalto officials contacted by Reuters said they had no immediate comment to make. Gemalto will publish third-quarter results on Oct. 23. The Amsterdam- and Paris-listed company has said that the revenue for which it will now compete with Apple represents only a small portion of its total payment services revenue, which it sees growing to 1 billion euros by 2017. But analysts said such targets were now at risk, while Gemalto could suffer if Apple Pay - available on Monday in the United States - spreads to Europe, where Gemalto has partnered with telecoms firms to corner the mobile payments market. The mobile payments market has been slower to expand than expected, but payment service providers have been looking to telecoms operators to roll out consumer-friendly solutions. (Reporting by Nick Vinocur and Blaise Robinson; editing by Mark John)