SIMs defy turndown, crucial for LTE… 

New data from IMS Research suggests that the Subscriber Identity Module (SIM) card market continues to defy the economic downturn that is currently impeding the mobile market. IMS reckons total shipments of SIM cards in 2008 grew to reach a record number 3.07bn. This is in marked contrast to the numbers from handset manufacturers which showed shipments declining sharply in the second half of the year.

“The well publicised slump continues to affect the mobile sector in 2009. Subscriber growth has virtually come to a halt in many mature markets and is slowing in emerging markets. Similarly the handset market is struggling with manufacturers scaling back operations and restructuring in an effort to minimise costs,” comments IMS research director, John Devlin. “We only expect subscriber numbers to grow 6.9% this year, which is a long way down from the 18.6% recorded in 2008. In terms of handset volumes the outlook is even worse; IMS Research is forecasting the market to shrink by 7.8% to 1.09 billion in 2009.”

However, figures from the IMS report, ‘Smart Card Annual Review and Market Share Update’, shows SIM card volumes rising by 419mn this year, pushing the market to a new high of 3.49bn. IMS asks the questions:  Why this is occurring? And what is driving this?

“Much of this is down to the simple fact that the cost of providing a SIM card is much lower than that of providing a handset,” explains Devlin. “With this level of price differential a SIM-only proposition is a much more attractive option for both network operators and consumers. It saves the operator the cost of subsidising a handset to make it more affordable for end-users, whilst providing a way to continue to sign up new customers – and perhaps more importantly re-sign existing ones. At the same time these savings can be passed onto subscribers in the form of more competitive, lower cost contracts and pre-paid bundles.”

This is apparently contributing to an increasingly competitive ‘grey’ area between operators and handset manufacturers. Operators have traditionally relied on new handsets to support new services and attract customers. However, developments mean that consumers taking advantage of SIM-only offers need not miss out on new services if they retain existing handsets. IMS notes that late last year Sagem Orga announced that it was partnering with BlueSky Positioning for A-GPS-enabled SIM cards to deliver services such as ‘buddy finder’, dating and nearest shop/restaurant/ATM. Similarly, earlier this year Oberthur Technologies launched a SIM card enabled with an accelerometer which will enhance applications and interactive services requiring motion sensing capabilities. Extending this trend, increasingly SIM cards will feature secure elements for mobile banking and NFC payments, and greater memory capacity and smart card web servers (SCWS) for enriched services and Internet usage.

“With everyone trying to define their unique selling point and gain an edge that justifies their long term competitiveness in this lucrative market, this will continue to be an interesting area of convergence and competition” concludes Devlin. “Whilst some of the mobile market has been hard hit by the economic downturn, it may just provide the catalyst for these new SIM-based developments to come to the fore.”

Trust me
Also weighing in on the subject of the wonders of SIMs is developer of Mobile Device Management (MDM) and SIM management software SmartTrust. The Stockholm-based company says that as service providers begin to build out next-generation networks, the SIM card lies at the heart of Long Term Evolution (LTE) and other sophisticated deployments. SmartTrust argues (perhaps not entirely uninterestedly) that because smartphones and other wireless devices operating on 4G and other systems will require SIMs, wireless operators, many who previously didn't deploy handsets which supported such cards, are now looking at a major new market opportunity.

“SmartTrust is convinced the SIM holds the key to realising significant new revenue opportunities for service providers,” reports SmartTrust ceo Jeff Bork. “With the resurgence of the SIM through next-generation offerings, our research and development efforts remain focused more than ever on enabling wireless operators to take advantage of the sizable investment in 4G infrastructure while reducing customer care costs.”

“There's little doubt that building next-generation networks is an enormous undertaking from both a financial as well as technical standpoint,” adds Bork. “Our ability to deliver a critical component that not only improves the total subscriber experience but helps open additional sources of revenue is a unique package that we are excited to offer to wireless operators around the globe.”

To date more than 200 wireless operators including AT&T, Claro, Telenor, T-Mobile and Vodafone have bought into SmartTrust for comprehensive SIM and MDM solutions.
John Williamson