SIM business model threatened
Nowadays, the SIM card industry is facing an existential crisis. During this year SIMposium, the global agreement is that M2M is taking off at last. But the way M2M takes off is by getting rid of the traditional SIM form factor. The industry consensus is that the removable SIM form factor is not adapted to M2M market constraints, as no one wants to remove a SIM in a device to change its subscription details, or even to change from a MNO to another. This leads the industry to agree on the embedded SIM (or eUICC) model for M2M business. Under this model, the SIM chip is soldered as a part of the M2M module. The eUICC model allows to change the operator contract over the air, and to have the M2M SIM switch from one operator to another one.
Many analysts from this point believe there is a business case for the same type of needs for the consumer mobile phone market. In the past, rumors and partial demonstrations have already happened. Allowing a SIM in a handset to evolve from an operator to another one brings a total disruption in the existing telecommunications market, as it means a shift in power.
For years, the SIM industry has been trying to add value to their products and to support the MNOs in their attempt to propose more applications to their subscribers. We have to conclude this strategy has not worked out: very few SIMs pack additional applications, and very few subscribers choose their operator according to additional services. Then, the handset vendors came with smart phones, and got control on application management in the hands of the consumer. For years the industry believed most consumers would not be able to manage applications on their handsets, until smart phone vendors proved the contrary. The eUICC model, in the consumer mobile phone market, would mean giving more control to handset vendors, or to Subscription Managers, an entity that remains theoretical for the time being. Along with handset vendors, handset operating system developers, Google, Apple, and potentially Microsoft, might become the central players of this new game.
This will not happen overnight. There will be more opportunities to meet in the SIM industry while its business model is evolving.