Exclusive Interview: Chipmaker Sees Strong Demand for Mobile IoT

Exclusive Interview: Chipmaker Sees Strong Demand for Mobile IoT

Georges Karam, CEO of Sequans, foresees exponential growth in Mobile IoT in 2018 and 2019


Georges Karam, CEO, Sequans

georges-karam-website-interviewFor chip designer Sequans, Mobile IoT is a major growth engine. Seeing strong demand from North America in particular, Sequans expects to ship ten times as many Mobile IoT Cat M1/NB1 chipsets as it did last year. “The market is happening now,” says Georges Karam, chairman and CEO of the Paris-based company. “We started shipping our Monarch chipset at the end of last year and we shipped more than 300,000 units in 2017. We see shipments exceeding 3 million this year. If we exclude China, the market is initially going to be focused on AT&T and Verizon.”

First unveiled in 2016, Monarch is Sequans’ single-chip solution supporting both LTE-M (sometimes known as Cat-M) and NB-IoT, the two main low power wide area technologies standardised by 3GPP. Georges Karam believes the original Monarch chipset and its derivatives have given Sequans a significant lead over most of its competitors. “In 2019, worldwide, we should see 50 million low power wide area connections, excluding China, and we expect to have close to 40% market share for our combined IoT products, because the competition is limited.”

That represents rapid growth from a standing start last year. In Sequans’ fourth quarter 2017 results call with analysts, Georges Karam described 2017 as the “first year of meaningful IoT product revenue.” In 2017, Sequans’ total IoT revenue grew 43%, accounting for 25% of its total revenue. “Q4 revenue included more than $1 million of Cat-M product revenue and several of our module partners landed new Cat-M design wins during Q4. Some of them represent multi-million opportunities for us,” the CEO said on the results call.

Sequans also has an LTE Category 1 chipset, called Calliope, designed to support IoT higher-speed applications, which was unveiled three years ago. “The market took a while before ramping up, but we now have an average volume of a half million units per quarter,” says Georges Karam. “As the market has moved quickly on LTE-M, that has limited the growth of Cat 1. You only go to Cat 1, if you really need speed (above 300 kilobits per second), voice, or video.”


Working with operators worldwide

Sequans says it is working with most of the leading mobile operators in developed regions to bring Mobile IoT services to market. “We have had demand from almost all of them at the same time,” Georges Karam says. “We are engaged very closely with AT&T and Verizon, and are now focused on Japan, which doesn’t have 2G and needs the IoT market to go to LTE-M and NB-IoT. We are in tests with 20 other carriers around the world: European carriers are also moving fast on this technology and we are working with Vodafone, Deutsche Telekom, Orange and Telefónica, as well as carriers in China, Australia and Canada.”

He sees Mobile IoT taking off in Japan and Korea during the middle of this year and Europe towards the end of this year. A second wave of deployments could also encompass developing markets. Mobile operators in India, for example, could adapt their expanding 4G networks to support Mobile IoT applications, such as smart metering, Georges Karam believes.

Whereas some carriers and IoT solution developers buy chipsets direct from Sequans, others will procure modules with Sequans’ chips pre-integrated from module suppliers. “For medium-scale deployments, say below one million units, service providers prefer to go with modules, so we work very close with module OEMs & ODMs such as Gemalto, Huawei, WNC and Foxconn,” says Georges Karam, adding that Sequans offers a single chipset worldwide, enabling customers to benefit from both flexibility and economies of scale.


Targeting three markets for Mobile IoT

Sequans sees three main markets for Mobile IoT technologies. Firstly, replacing 2G connectivity in the traditional machine-to-machine (M2M) sector. “If you were using 2G for M2M, which was not good on power, there is no reason why you would not adopt this technology,” says Georges Karam. “These are the first movers, as there is no question about the business case. These applications include electricity metering, water and gas, fleet management and the after sales market.”

The second market is the asset tracking and logistics sectors: the Sequans CEO sees the power consumption advantage of Mobile IoT technologies opening up new opportunities for tracking a wide range of assets, people and pets, which can make businesses much more efficient, while saving individuals’ time. “Asset tracking will be a big area, as the IoT is all about observing the world,” says Georges Karam. “There is a company that sells paper towels. Whereas they used to have to call customers every couple of weeks to see if they needed more, they now use connectivity to coordinate just-in-time deliveries. It is transforming their existing business, making it more efficient and increasing sales, as their customers don’t buy paper towels from anyone else now. They have increased their revenue by 20%: all this because you can observe in real-time.”

The third market identified by Sequans is the consumer wearables sector. Although he anticipates this market won’t develop until 2019, Georges Karam believes low cost, low power wide area connectivity will make it feasible for people to continually wear devices that monitor their wellness and health. In 2018, Sequans plans to pave the way for that market by rolling out highly-integrated solutions that enable the connectivity module to be very small. It has announced it is working with Skyworks to deliver a “system-in-a-package” (Monarch SiP) designed to support an ultra compact device, such as a wearable. Sequans has also developed a system-on-a-chip, the Monarch SX, which features an applications processor and a sensor hub that can wake up the device as necessary. The Monarch SX is also designed to support a connected display, such as that used by a smart watch. Finally, Sequans has also unveiled the Monarch N, a dedicated NB-IoT chip, optimised for very low power and low cost applications.

Georges Karam believes that Sequans’ focus on the IoT gives it an advantage over its rivals. “When we went to do LTE-M, we started building the chipset from scratch, whereas our competitors take an existing chip and adapt it, meaning it is not optimized for power and their solution is more complex and more expensive,” he says. “Moreover, we have carrier-grade technology: carriers trust our technology.” Sequans is also looking to get its chipsets in the hands of developers. It works with NimbeLink and Pycom, as well as mobile operators, to enable developers to quickly test their solutions with Mobile IoT connectivity.

The rollout of Mobile IoT networks and connections will be followed soon after by the first 5G systems, which are also designed to extend the Internet of Things into new areas. Georges Karam believes 5G will expand the Mobile IoT market, rather than disrupting it, by giving solution designers the flexibility to mix and match high-speed and low power connectivity to suit their applications. “In the connected vehicle market, for example, you will need both technologies to solve all the challenges,” he notes.

Sequans’ wider vision is that both companies and consumers will routinely use the IoT to observe the world in real-time, relying on Bluetooth and WiFi for short-range connectivity and cellular technologies for wide area connectivity. “The only technologies that makes sense for long range are 3GPP,” says Georges Karam. “So we track the 3GPP and aim to lead in terms of time to market.”