Smart ideas enable a smarter world

May 26, 2016

Blog

Yunsang Park, Senior Vice President and leader of modem & IMS technology, Samsung

The embedded SIM will play a fundamental role in bringing a new wave of users and customers into the mobile ecosystem.

Photo Yunsang Park Senior Vice President and leader of modem & IMS technology Samsung(1) The adoption of the GSMA’s remote SIM provisioning (RSP) specifications as a de-facto global standard is not just a nice-to-have – it is a fundamental building block in our industry’s next wave of development. The global mobile industry is in the process of embracing the Internet of Things (IoT), and consumer connected devices are perhaps the most important category. Being able to embed a SIM directly into the hardware of a watch or camera will open up huge opportunities. It is a technology whose time has come.

Some context: ten years ago, the emergence of Android and iOS smartphones heralded a revolution in mobile services and opened the door to countless new players from outside the traditional mobile ecosystem, such as game developers. Today, the global mobile industry is worth $1.1 trillion a year. The problem that emerged was subscription saturation and fierce competition. Between 2008 and 2014, mobile connections grew at 9.8% CAGR, but GSMA Intelligence forecasts that this will fall to 4.2% CAGR between 2014 and 2020. There is a corresponding drop in average revenue per user (ARPU) which has been in steady decline in Europe and North America since 2008, claims Strategy Analytics.

So it is vital the mobile ecosystem is open to new ways of doing things. Consumer connected devices have been one of the fastest growing segments in consumer electronics. But they have not reached their full potential because they typically need to be tethered to a smartphone or synced with a PC by USB. Pairing a device to a smartphone is not as simple as it should be. With its cellular connectivity, a smart watch, for instance can be set up so easily without having to be paired.

Broadly speaking, connectivity, security and reliability are the core features of the mobile ecosystem and helped power smartphone usage growth. The IoT, whether it is a wearable, connected car, home appliance or tablet, also requires widespread connectivity, end-to-end security and reliable service. And the SIM card is the passport into this ecosystem.

We have adopted this specification for our flagship smart watch, the Samsung Gear S2 Classic, which has an embedded SIM that is activated by the user. The provisioning process is straightforward, taking less than a minute (this figure is being further improved). You can watch this demo for yourself. [LINK]

eSIM benefitting the whole industry

eSIM offers a greatly improved user experience. End-users choose a service provider based on the best data plan or perhaps bundle of device subscriptions. And if they want to switch to a new provider or decommission a device, it is simple: eSIMs bring fundamentally more flexibility over the lifetime of the device. When your contract is over you can swap provider instead of having to go to the trouble of unlocking a mobile device. End-users would simply be able to switch providers via the device’s settings – a big step forward in convenience and flexibility. Obviously this can only be within the terms of their contractual relationship with the operator.

Another eSIM benefit is that it gives device manufacturers an opportunity to reduce the size of a device or potentially increase battery size. The eSIM in our smart watch meant we could reduce the overall size making the device more wearable and waterproof.

An additional benefit of a global eSIM standard for consumers is in the manufacturing and supply chain. Being able to ship the same model of connected device anywhere in the world, to any market, will help lower device prices for consumers and reduce inventory build-up. At present a device made for an operator in country A cannot then be sent to a different operator in country B, so retail channel and operators must be very accurate in sales forecasts. If they get it wrong, they have to heavily discount to clear inventory. One device / global market is going to be benefit not just large OEMs like Samsung but the smaller device manufacturers with bright ideas, so they can reach economies of scale.

So, it is a good idea to consider RSP as being of benefit to everyone in the mobile ecosystem. Operators can gain new business opportunities, reduce logistical costs and retain existing SIM security levels. SIM Manufacturers add flexibility to their current products and gain access to new markets. Business customers have the reassurance of a common global architecture which adheres to existing SIM capabilities, and ultimately end-users can enjoy a seamless experience on multiple devices. RSP is set to play a key role in the future growth of mobile communications market.

Wearables are just the start

There will be many device categories that can benefit from an eSIM. This year’s MWC was full of these new ideas and possibilities. As a leading device manufacturer, we plan to introduce many more devices that utilize the RSP specifications.

Yunsang Park is a senior vice president and leader of modem & IMS technology at Samsung Mobile Communications Division. He is in charge of developing enhanced communication platform and services in Samsung’s new devices.

Back
Contact GSMA Legal Email Preference Centre Copyright © 2018 GSMA. GSM and the GSM Logo are registered and owned by the GSMA.