The mobile revolution is under way
We were used to a model in which most of the subscriber-related added value came from the SIM card. And our industry has been prospering over the last decade by proposing permanently more memory and more added value to telecom operators. This was the right thing to do as long as operators were the ones leading the game.
But this may change now. We have seen recently Apple arriving on the market with a totally proprietary handset, and asking operators to payback a fee for the right to use the Apple platform. This is a complete revolution when compared to the traditional business model when operators were subsidizing the handsets to encourage customers to use more airtime. As Apple name brings some magic, and is sufficient to make a product desirable, the company is in a great position to deal with all the major operators: AT&T in the USA, O2, T-Mobile and Orange in Europe, and now China Mobile.
A new evolution may come with Android, supported by Google (cf. Smart Insights #07-45). As of now, proprietary handset operating systems still play an essential role, and represent a large marketshare for most basic phones. On the other hand, Symbian, supported by Nokia, already represent a 70% marketshare for smart phones in Europe. And Microsoft's Windows for Mobile comes second. Most of the industry is present in Google's Open Handset Alliance, the association that will launch Android-based handsets. And the promise is for an easier and cheaper development of applications on the handsets. For the handset manufacturer, Android will not incur any royalty or license fee. This way, handsets will become cheaper…
At the same time, alternatives to GSM, 3G etc… are developing with Wifi, and WiMax networks, voice transport is becoming cheaper, or free, and will not represent the main source of income for mobile network operators in the near future.
The network operators are to become application and contents providers if they want to survive in this new environment. This will undoubtedly impact the SIM card market.