MUNICH (dpa-AFX) - A prop of the cell phone age manufactured in billions of units is disappearing from the first cell phones: the SIM card. Developed in 1991 by Munich-based Giesecke+Devrient, the company is now marketing a digital version called eSIM, which is permanently installed in the phone without plastic cards as a chip. "In the U.S., the iPhone 14 already no longer has a slot for a SIM card, but only a built-in eSIM," says G+D CEO Ralf Wintergerst.
SIM stands for "Subscriber Identity Module." The original purpose of the cards was to uniquely authenticate users in the mobile network, but many security functions have since been added. One of the practical benefits of the eSIM is that no physical card has to be inserted into the slot - a more or less difficult finger exercise depending on skill. Until now, vacationers or business travelers overseas have often bought a second SIM to avoid an astronomically high phone bill. Several contracts can run simultaneously on one eSIM.
But with the eSIM, the company primarily has a target group in mind that neither makes phone calls nor writes Whatsapp: Machines. "The eSIM system is now also installed in BMW models, for example," says Wintergerst. "We are investing heavily in solutions for the Internet of Things to expand connectivity services between linked devices."
The "Internet of Things," known as "IoT" in industry-standard shorthand, is now the real growth market. Hamburg, Germany-based market research and consulting firm IoT Analytics estimates that by the end of 2022, there were 14.3 billion connected devices worldwide, nearly 2.9 billion of them via cellular, according to a spokesperson. The remaining machines are largely connected to the outside world via WLAN or Bluetooth.
By 2027, there could be as many as 27 billion connected machines and devices, six billion of them via mobile communications, according to IoT Analytics' forecast. And one day in the not-too-distant future, the number of machines with cellular connectivity is expected to exceed the number of people on the planet.
There are many conceivable applications - primarily devices and machines that move or are remote from a server. Cars are just one example. "Our newly acquired subsidiary Mecomo, for example, offers track and trace" - meaning "search and find" - "and services for large logistics companies," Wintergerst says.
"This can be used to determine where a good is at any given time. I thought this would be a long-solved problem, but it's not." Even at airports, he says, there are often luggage containers sitting around - "and the staff has to search for fifteen minutes until they find the right one. That can be solved relatively easily," says the manager.
The G+D CEO cites digital agriculture as another example. "Sensors can be used to measure how irrigation and plant growth are doing." Since the sensor has to transmit the measurement results to a server, a connection is necessary. In the field, pasture and orchard, Bluetooth or WLAN are not usable due to lack of range, and the obvious solution is cellular connectivity.
Because of its rapid growth, the machine-based clientele is naturally also a coveted market for telephone providers. According to IoT Analytics, Deutsche Telekom ranked fifth in 2022 with a global market share of just over five percent. Compared to some human customers, machines are presumably pleasant to deal with: they don't complain angrily about dead spots, but transmit error messages at the highest possible rate.
"We delivered our first SIM card to Mannesmann, virtually sawed out by hand," says Wintergerst. "Over the years, we've made about nine billion of them. It used to be a physical product for which we got a monetary amount per piece."
The manager says the eSIM chip is built in when the phone is manufactured - "and we get fees from customers for activation and software licenses in a completely digital business model."
Meanwhile, there are other SIM card manufacturers besides G+D. It is no longer possible to determine how many cards have been produced worldwide since the first cell phones were launched in the 1990s. According to the International Telecommunications Union (ITU) in Geneva, by the end of 2021 there were 1.7 billion mobile phone contracts in China alone, 361 million in the U.S., and 106 million in Germany. Many other countries also have more mobile phone contracts than inhabitants.
Cell phones have comparatively short product cycles, and many people like to get the latest models. This is reflected in the figures published by the German digital industry association Bitkom: Since 2006, more than 284 million cell phones have been sold in Germany.
Since often only the phones are changed when the contract continues, this cannot be equated with SIM sales. But there can be no doubt that the number of cards is also still rising.
But the days of rapid growth in the human market are over. The record year in Germany was 2015, with over 26 million smartphones sold in Germany. In the meantime, annual sales have leveled off at a good 22 million units. Bitkom expects smartphone sales to remain stable at a very high level in the coming years, according to a spokeswoman. "In particular, smart devices such as smart watches and other wearables continue to grow."/cho/DP/he
