Last updated: 19 February 2015
Since the launch of Apple’s iPad Air 2, the first to come with a SIM preinstalled, last October we’ve seen the presages of a new ecosystem for the connected consumer electronics.
Whilst we’ve previously forecasted that the overall potential of this market is huge and will translate into great opportunities for Mobile Network Operators (MNOs); we’ve sponsored Ernst & Young’s(EY) latest “on demand subscription management” study to better understand precisely what these opportunities are.
The study, which can be downloaded here, investigates how MNOs around the world perceive on demand subscription management. It’s taught us three key lessons which suggest a new turn for connected consumer electronics market.
- Adoption of embedded Universal Integrated Circuit Cards (eUICCs) is still at the early stages of development in the MNO consumer market – but new connected consumer devices coming to the market shows the tide is turning, and we predicted we’re going to see more and more similar products in the near future. Particularly as the GSMA launched the major “Embedded SIM” specification for the Internet of Things over a year ago. It’s just a matter of time before this revolution spills into the consumer market.
- MNOs have mixed opinions about eUICCs in consumer devices – some see advantages in the rapid take-up, whilst some fear it will make it easier for rivals to poach their customers. I think this fear is misplaced as consumers are most likely to use their mobile operator when connecting their tablet for example. It’s just up to the MNOs to persuade their customers this is definitely the case with the right value-added connectivity deals and plans that meet their needs.
- MNOs have identified the disintermediation with their end-user and heightened real-time competition with other operators as major risks – However, MNOs will be spurred to adopt the eUICC by the need to develop revenues, cut costs and enhance operational efficiency and comply with regulations. Even if some MNOs remain suspicious about on demand subscription management, notably for losing their direct relationship with the customer, they will eventually understand it is a real opportunity to open up or develop the booming connected consumer electronics market. Indeed, on demand subscription management means they just have to focus on delivering the connectivity to billion of new connected devices all around the world, for new revenue streams.
In conclusion on demand subscription management is definitely the right solution to get consumer electronics connected wherever and wherever we want, in combination with offering consumers the right connectivity deal. It will allow Mobile Network Operators to tap into the opportunity this market represents. For tables alone, with only 25% of the total sold today being cellular-enabled, the potential is huge.
*Source HIS 2014