A truth that is sometimes difficult for the mobile industry to acknowledge is that most consumers aren’t fixated by the device, it’s what they can do with it that is key. Apoint that was repeated a number of times at Mobile World Congress was that device categories are being eroded – from the smartphone through to the television. The challenge for the industry is to ensure that this trend remains beneficial to it. While the take-up of tablets and laptops has been very positive, the number of cellular connections sold into these types of devices remains low. Last year Apple got the industry talking when it put cellular capabilities into the latest version of its popular iPad. But the move also demonstrated how dominant WiFi is as the connection platform for these products.
Taking advantage of it all
Gemalto is one firm that is hoping to cash in when these type of connections become commonplace. Speaking to Mobile, the firm’s marketing and business development director of on-demand connectivity Emmanuel Legros (pictured), said:‘Eighteen months ago Gemalto created a new department in the business called “On-demand connectivity”, focusing on the way we can connect devices with celluar connectivity. We already had an M2M side to the business and so we wanted to build celluar connectivity unit onto that.
‘Tablets with cellular connectivity currently amount to around 10% of the market. But there is a lot of potential there, particularly as the demand for non-stop connectivity has increased. The benefits from increasing this connectivity provide opportunities for different parts of the market. Manufacturerscan create more value and use the connection as a differentiator, as we saw with Apple and the launch of the SIM enabled iPad. The more devices you connect, the more you also increase the reach of the OTT companyand the telco operator.This means more value for advertising or increased database value. For those with stores there is the opportunity to sell more because people are connected more often – that applies to digital and physical goods.’
Legros believes that increasing cellular connectivity also opens up the possibility for selling one-off connections during peak usage times when broadband speeds are lower: ‘It could reduce the time it takes to connect – the evening often is the prime time for use on a tablet. The addition of cellular connection presents the customer with the chance to sign up for a cellular network for a short period.’
Watch this space
The smartwatch presents a major opportunity for cellular connectivity. So far these devices have developed primarily as slave units, but it seems only a matter of time before they become connected independently to the cellular network. Legros certainly believes Gemalto is well placed to take advantage of this: ‘A big new market is the machine to user market, within that there are two main segments;the primary device for the end user to be connected and then there is the secondary device.Primary devices are those such as the smartphone or laptop; a secondary device would be a wearable or smartband. The secondary device is a new market and it’s still a bit fragile. But by the end of the year we can expect this market to grow. We already showing what can be done; at MWC we did a demonstration with Limmex of an emergency smartwatch with cellular connectivity. The device has a button that initiates a call answer on the watch. We are looking carefully at the smartwatch markets, and when a manufacturer wants to add the cellular capability we are ready.’
The time is… Now?
The biggest question that remains over the expansion of cellular connections is when exactly it will happen. Dates and figures are presented regularly about how much the market will be worth by what point, but until units start being shifted it’s difficult to get too caught up in it. Legros believes that in certain areas the trend has already begun and it’s now a question of how fast it will develop: ‘When will it happen? Well it depends on the area for laptops, the automotive industry and tablets –it’s all different.For the cars it has started already, because there is safety regulation coming infor 2016 that requires new cars to have a cellular connection.For consumer devices it will come very soon – as soon as the end user can see the value it will happen.The Apple SIM is one of the first examples on the market; the question now is when will the others follow?’