MWC Roundup: Future of SIM

Gemalto – eSIM is cool, but you should really start thinking TCO

Gemalto’s Francis D’Souza, VP IoT Services, sat down with us to talk through the company’s module and SIM-based portfolio, but an anecdote about the price that a major consumer goods firm wants to pay for a pallet tracking application captured our attention – about $0.05c per unit. The gulf between that level and the prices that current IoT vendors could supply asset tracking with LPWAN technologies is a chasm, and it’s one that seems to be a very long way away.

D’Souza talked of how Gemalto’s identity services, the chips and software that prove the identity of a device to a network or application, are vital for creating trust in the quality of data being delivered, and how a lack of trust would completely undermine the value of an IoT application.

D’Souza also called for IoT stakeholders to think of the Total Cost of Ownership (TCO), in their businesses, rather than the per-unit cost. He stressed that the need to push updates to devices could explode the TCO, as bugs in software or changes in network configurations need to be sent to the devices. These updates require the on-device OTA update capabilities, but they will also require air-time, which will use up valuable battery capacity – a problem that is made worse if the network quality is poor.

To illustrate this point, D’Souza described how gas meters are often installed, where the technician checks the signal strength of the local MNOs using a selection of SIM cards – choosing the SIM that has the best coverage for the gas meter. Within the lifetime of the meter, there is a good chance that the chosen MNO will make changes to the local RAN configuration, which could dampen the signal strength – leading to the device using more power to send its messages. This change would then lead to a truck-roll needing to be made, to swap out the device or change its battery, and the TCO increase may well have ruined the business case – thus spake D’Souza.

As such, having a service (like the ones that Gemalto can provide) that can detect these changes in the device and then try to accommodate them using power-saving mode (PSM) tweaks, means that TCO can be reduced. D’Souza says that these kinds of services, at scale, cost about 5% of the module price, but that they used to be about 20%.

Similarly, the rise of eSIM is also going to be welcomed by IoT customers, according to D’Souza. The embedded SIM chip (eSIM) is more reliable than the electronics needed to support SIM trays, meaning that the components should have a longer field-life. The chip also helps keep production costs down, as one Nordic smart meter vendor found out, when it had to add a human to production lines just to insert SIM cards – something that can be avoided by using eSIM, as it is just another chip on the PCB.

Gemalto is also putting a testing system into its modules to determine the best network choice for a device, to accommodate the aforementioned gas engineer’s experience – which you can’t do if there’s no SIM tray, after all. While eSIM is going to be more expensive than legacy SIM hardware in the short term, D’Souza again stresses that you should be thinking about TCO. Another major benefit of eSIM is theft, or rather, the lack of it, as many customers are concerned about their connected devices having their SIM cards stolen and then used in phones.

Arm – eSIM, iSIM, and Pelion form cellular IoT vision

Arm continued the eSIM conversation, with Vincent Korstanje, VP and GM Incubation, outlining the opportunity for both eSIM and iSIM (integrated SIM, deployed inside the chipset rather than as a separate chip on the PCB). Korstanje described, like D’Souza, how there was a need to be able to update these devices, and that there are major benefits to being able to seal up a device completely, from water and dust penetration, as you don’t have to make the SIM tray accessible.

Now, Arm is something of an outsider in the SIM world – coming at it from the chip design angle, and not part of the old-guard of Gemalto, G+D, and Idemia. To this end, iSIM puts it into contention with the other SIM providers, as the iSIM would negate the need for an eSIM chip or legacy SIM design. Arm has a big advantage here, over these rivals, as it designs the chips that power these SIM-needing devices, and so there’s a pretty big looking wall in place there.

We asked Korstanje if eSIM was a stepping stone to iSIM, to which he said it a bit of a yes-no answer. Power leakage from eSIM components might push developers towards iSIM designs, but if a government were to mandate a specific eSIM chip for use in contracts, then this removes iSIM as an option for those sorts of devices. eSIM might offer more flexibility in this regard, he said, but iSIM will let you have multiple SIMs inside a device, so that you could have separate iSIM instances for the IVI system and the telematics system in a car, for instance.

In addition, Korstanje said that once iSIM is viewed as just another part of the chip, it could become a ubiquitous option. If the difference in cost for the chip is just a few cents, then shipments should increase and lead to the scale where you can begin to do more with the technology in other applications. This would include in U-LPWAN environments, where you could use the iSIM to carry out security functions, rather than just to link it to an MNO’s network.

As for markets in which eSIM and iSIM will prove popular for Arm’s Kigen portfolio, Korstanje pointed to automotive and industrial, but noted that all cellular devices are candidates for iSIM. Arm believes that around 5% of connected devices are cellular, and if its prediction of a trillion connected devices by 2035 is on the mark, then that’s an awful lot of sales opportunities.

We also checked in with Arm’s Pelion platform, which it has swelled via acquisitions. Charlene Marini, VP Strategy in the IoT Services Group, explained that the company would never rule out more acquisitions, but that it now has the foundation.

The main verticals being targeted by Pelion are Retail, Utilities (more focused on metering), Transport and Logistics, and Smart Spaces, which Arm outlines as smart home, smart buildings, and also smart cities, as the trio interact rather a lot. To this end, Arm is looking to grow the ecosystem around the platform, with partnerships being a priority.

Marini explained how Arm is in a very different place than it was a couple of years ago, post-SoftBank acquisition and with a new focus on services revenue. She noted that she has been talking about the Internet of Silos for about five years now, and that it now seems that the enlightened players have realized that the IoT is going to be a web or mesh that requires a lot of collaboration.

To this end, Arm feels that its strength lies in creating these ecosystems, something Marini stressed in her reply to our question about whether Arm fancied moving up the stack to the cloud computing layer. That was best left to subject-matter experts, said Marini, who added that in five years, the typical cloud application might be running on ML-enabled edge devices.

As for IoT sentiment, Marini said that the trend had definitely been over-hyped for some time, but that the velocity of innovation was still very fast. There are geopolitical considerations and privacy and security factors that could have an undue effect on the market, and that burnout from ‘pilot purgatory’ was a serious concern. Marini added that the industry still is not ‘secure by design,’ a concern seen in our discussion with Kudelski.