The smartphone and the eSIM: ignore it at your peril
The eSIM is the next App Store — a veritable breeding ground for development and prosperity.
By Steve Adler
When the iPhone and Android explosion was just starting, my challenge at the time was the question: ‘call yourself a smartphone? Show me how smart you are’.
It was a slightly lonely position amid all the fanboy cheer and clamour, but I couldn’t help feeling that, while they were teeming with features, they lacked real-world benefit. They didn’t really help me with my busy life and they didn’t link with other ecosystems, like my car and my home.
(I can now answer my front door and unlock my car from my phone, so we have made some progress.)
Now, my challenge is about the SIM. It’s actually a very smart element — it identifies the owner of the connectivity and, more importantly, who pays the bill. It’s unique to you and fully secure. But why does it remain the last piece of plastic that you have to insert into your phone? Why has it not gone digital?
The answer is fear of change.
I remember when Kindle first launched, the media panic at the time predicted the end of the book. Same with Netflix killing the cinema and Spotify ruining the music business. In the end, these innovations increased choice, expanded the channels to market and led to industry growth. It is a matter of adding new services rather than removing old ones.
Sure, some fell by the wayside — how many music retailers remain, after all? But, maybe, they were in the best position to provide the new digital music streaming service but just couldn’t see the vision, or — more likely — saw it but decided it didn’t fit their business model. They defended rather than embraced.
So, again with the SIM. Do we see the vision? Are we looking for new ways to unlock the hidden power of this little device within a device? Moving to a digital format — by moving to eSIM — creates a platform for innovation just as with other sectors.
The eSIM: the invisible revolutionary
The eSIM is the next App Store — a veritable breeding ground for development and prosperity. Apple itself fired the starting pistol last September, including it in its latest iPhone series, as well as its iPad Pro range. You can’t hear the consumer clamour yet, but there it is. Right in the new iPhone and Google Pixel, ready to be seized upon.
Just as the proliferation of USB drives depended on the prior implementation of USB ports in PCs, the presence of the eSIM in the smartphone moves the industry forward and opens up new, previously unconsidered, revenue streams for both Internet of Things (IoT) and consumer devices. It offers new ways of managing and deploying connectivity, without the hassle of physical SIM cards. Designers can gain deeper insights into how their products are used as more devices leverage eSIM for on-demand cellular connectivity. This, in turn, enables more rewarding user experiences and new revenue opportunities through bolt-on services and subscriptions.
And, over the next few years, there is little doubt that mobile operators are set to reap huge rewards from the eSIM, given a chance to showcase new products to new users previously unavailable to them, connect more devices to their network and dramatically improve the customer experience.
But what about other sectors? Media, healthcare, banking, travel? Americans spent about 7.5 billion minutes watching Netflix on their phones in June of 2017, according to ComScore, up 73 percent since 2014.
And, despite the best efforts of many developed cities, access to a high-speed public WIFI network is still in infancy. So, what if you want to stream using 4G or LTE? That’s a lot of data. Wouldn’t it be something if Netflix could package up their subscription with mobile connectivity — tailored for high-bandwidth, high-consumption data use?
What about connected TV manufacturers? Isn’t it a little crazy that, with only 40 per cent of the devices actually connected, retailers know more about the end user of a connected TV, for example, than the manufacturer itself. The secure identifier in the eSIM changes that — providing manufacturers with data on viewing habits that will make Nielsen studies look like straw polls. We know a lot of advertisers that would pay a lot of money to know which half of their advertising is working, and which is getting lost in the crowd.
That’s the thing about the eSIM: when people talk about multiple profiles, what they really mean is multiple channels. It turns the smartphone into a multi-channel device for the first time since its inception. Customers can have a high-speed data SIM channel for streaming TV, another low bandwidth, low latency channel that sends live medical data to a secure cloud. Each of these connectivity packages are — for the first time — tailored exactly for their use case.
Collaboration and interoperability: the future of connected devices
Steve Jobs once said, “people don’t know what they want until you show it to them”. Following that doctrine, this should pose a special problem for the eSIM — a feature that is famously invisible. But it won’t take long to reveal the market-changing aspects that the eSIM — the world’s first smart SIM — brings.
For one thing, it’s already widely accepted by the telecoms market, eSIM is the new standard in SIM card technology. This is crucial: it satisfies my problem with the smartphone: complementarity and compatibility between networks. It facilitates an open platform with streamlined agreements and an open architecture — bringing a standardisation to connected devices not seen before. Let’s just make sure that we are really creating it open and available to all.
This sort of innovation blows past any model or projection or diffusion. It’s imposed by a collective will and sweeping change decided upon by true leaders.
It proves that it is when we lead the industry rather than follow it, and only when we work together to achieve full interoperability between networks does the industry take a step forward.
The future smartphone will be a multi-channel device. Nobody asked for it. But we’ll show it to them and they’ll want it.
Steve Alder leads Truphone’s global strategic partnerships for future business opportunities.
As Senior Vice President at Telefonica, he was responsible for bringing the iPhone to the UK, with an exclusive deal between O2 and Apple. He was also CEO for start-up business Jajah Inc in San Francisco.
