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Embedded SIM threatens SIM manufacturers

Updated:2010/11/29 10:26

The GSM Association (GSMA) has amended their regulations to allow for a programmable built-in SIM module squashing the SIM Alliance's arguments highlighting the advantages of the SIM card that cite portability of device, a wide compatibility, reduced operator costs, and better security by limiting the access to the storage on the SIM card.

Members of the GSMA organisation such as AT&T, Deutsche Telekom, and Verizon (part owned by Vodafone) propose a new standard for an embedded SIM module which would eliminate the need for a SIM card slot in a mobile phone. The operator profiles would be uploadable to the device via a solely operator owned/controlled system.

The new architecture would also allow for operator profiles to be replaced by other operator profiles making the portability arguments against the new system moot. The first wave of devices is expected to come out in 2012 and contain a SIM slot for backwards compatibility purposes.

The serious implications of this could mean that a SIM manufacturer may no longer be needed as the phone manufacturers would work directly with the IC suppliers. Instead of the current SIM suppliers, a handset manufacturer could hire a lower cost software development company to design and integrate the phone activation part of their system.

The predisposition to using a SIM-less system may however not be the same when moved from a strictly American context to a global one. A number of North American telcos are already used to devices that tend to not use a SIM card. Even carriers who are currently using GSM-based networks and SIM cards are mentally prepared to go back to a SIM-less system. However, judging by the recent outcry by European telcos and informal threats of cutting subsidies for devices that use a built in SIM, rather than a replaceable one, there is a very strong bond between SIM card manufacturers and telcos in Europe.

IMS Research believes that despite the attempts at standardisation of a SIM replacement technology there would not be a widespread use of SIM-less solution and at least in the medium-term SIM cards will retain their relevance.

To a large degree, the success of the new technology would depend on the success of a rumoured Apple SIM-less device and the success that Apple has in convincing non-American telcos of the benefits of the new system, according to IMS Research. Even if Apple does prove to be successful, IMS Research says, in the medium-term the impact on the overall SIM market would be limited as most devices shipped over the next five years are forecast to still use removable form factors.

 Source:eetindia
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