connected world - dc5tqsrhldvnl.cloudfront.net · the dawn of a new wave of digital. he calls it...

Connected WorldThe Gemalto Netsize Guide 2015featuring wearables, watches, cars, smart meters, SMS, locks, secure products, NFC, smart cities, mobile ID...and bees

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The Gemalto Netsize Guide /// Contents

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INTRODUCTIONIntroducing our connected world.................................08IoT technologies and platforms ...................................12

ON THE COMMUTEThe connected car ........................................................20Towards new motoring models....................................24Q&A with Jaguar...........................................................26Connected insurance claims........................................30SMS is just the ticket....................................................34NFC is OK for TfL..........................................................38Singapore goes smart ..................................................42

AT WORKA SIM for the industrial world ......................................48Keeping M2M secure....................................................52Connected machines....................................................56A SIM to save the honey bee ........................................58SMS in the enterprise...................................................60

AT LEISURENext gen locks and access...........................................66Q&A with Misfit wearables ...........................................70Spending e-money........................................................74Time for the smart watch.............................................76Keeping up with contactless ........................................82Tap to pay from the phone bill......................................84Mobile ID .......................................................................86A Spotify for reading .....................................................88

THE FUTUREThe view from Fjord ......................................................92A perspective by CCS....................................................96

DATASmartphone data........................................................102Mobile OEM market shares........................................103Smartphone OEM market shares ..............................107Smartphone OS market shares .................................112IoT forecasts ...............................................................114

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Preface /// The Gemalto Netsize Guide

Welcome to theGemalto Netsize Guide

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Welcome to the 2015 edition of the Gemalto Netsize Guide. This one’s abit different. How? Well, for the first time, it’s not exclusively about themobile phone. Instead, we’re taking a deep dive into the next big phase of mobility – theworld of connected things.Most readers will recognise this shift from their own business dealings.Visit any mobile trade event and, in addition to the many impressive newsmartphones on display, there will invariably be connected cars, smartwatches and intelligent home appliances. It’s amazing to see luxurygoods firms and even toothbrush makers engaging with our business. So the Internet of Things is well and truly launched. But importantquestions remain. What are the best user interfaces for smart devices?How can they be protected from hackers? Which connection technologyshould they use?In this guide, you can find out all these topics and more. You’ll see howsmart devices might affect life at home, at work, on the commute and atleisure. You can also catch up on related mobility topics such as mobilepayment, NFC, and messaging. Meanwhile, as ever, you’ll find the comprehensive market informationand statistics we know you appreciate.Enjoy!

Philippe Vallee,Chief OperatingOfficer, Gemalto

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For over a decade the GemaltoNetsize Guide has explored the impactof mobile on people and companies.

In that time, we’ve seen thetechnology move from feature phonebeginnings to smartphone maturity.

Now, mobile is taking its place amid abroader revolution. The phone ismerely one ‘thing’ in a huge networkof connected things.

That’s why we’ve broadened the focusof this 2015 edition to investigate theimpact of IoT on our commute, ourwork life and how we spend ourleisure time.


The Gemalto Netsize Guide /// Introduction

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Introduction /// The Gemalto Netsize Guide

In this edition of the Gemalto NetsizeGuide, Fjord’s Mark Curtis heraldsthe dawn of a new wave of digital. Hecalls it the era of ‘living services’. After the desktop and mobile eras,he argues, we’re now entering aphase in which sensors will beembedded into wearables,appliances and industrial objects. Asa result, these devices will change inresponse to context. In a sense, whatwas previously dumb will becomealive.

The pace of change in digital isstaggering. Around a decade ago,when the Gemalto Netsize Guidewas first launched, the focus wasvery much on the impact mobilewould have on our lives. Today, thatfascinating story is still being playedout. But there impact of the so-called Internet of Things could beeven more profound. Why? As Curtis says: “the connectedfuture will not just be about ‘me’. Itwill extend into industry, transport,

health and agriculture. It will reachinto very facet of human activity.”The market watchers agree that theIoT is set to skyrocket. ABI Researchsays the installed base of activewireless connected devicesexceeded 16 billion in 2014 but willhit 40.9 billion by 2020. MeanwhileGartner estimates that IoT productsuppliers will generate $300 billionby the same time.Of course, all these products willgive rise to a vast new market for IoTsolutions – one which IDC forecastswill grow from $1.9 trillion in 2013 to$7.1 trillion in 2020.The impact will be everywhere. Inthe consumer space, people are juststarting to become aware of thepotential of connected devices(beyond phones and PCs). Till now, the spotlight has beentaken by wearables – largely fitnesstrackers and to a lesser extentsmart watches. It’s all been quiteinward-looking and geeky: thesedevices mostly track a user’s activityor display notifications. However, experts think the eventualpurpose of the wearable will be as aremote control for the world. Thesedevices will sync to sensors insideother objects to save time and effort.Thus, the watch will open your frontdoor, start your car, tap to pay in

Network effectA world of connected devices lies just around the corner. Rémide Fouchier, VP of marketing communication at Gemalto,ponders the possibilities of this exciting new future.

In virtually every area ofindustry, makers of simple‘dumb’ devices will have toadjust to the challenge ofmanaging ‘living’ goods.


stores or pulse to give youdirections.Clearly, both Apple and Google aredriving towards this future. Applecreated HomeKit as a platform toput IoS in control of the smart home,while Google spent $3 billion onNest, maker of a smart thermostat.Insiders expect Google to build out asmart home strategy from thisacquisition. It is even rumoured to belaunching a dedicated IoT OS calledBrillo.

The design factorIt’s logical that these tech giantsshould eye appliances andwearables. They’re huge markets.But these spaces require a differentapproach from traditional tech. Inwearables, for example, the designfactor is paramount. Simply, people

will not wear utilitarian products. This explains why fashion companieslike GUESS (interviewed in thispublication) have entered the smartwatch space. And why some startupsproclaim design to be the mostcritical factor in a wearable. Sony Vu,founder of Misfit (also interviewed),sums up his approach as follows:“We started with what people wouldwear, and then we workedbackwards.”Alongside smart home andwearables is the connected car.According to IHS Automotive, thenumber of cars connected to theInternet worldwide will hit 152million by 2020. This process isalready under way with most newmodels allowing drivers to connecttheir phones to the in-car systems.At present the main drivers of in-car


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Rémi de Fouchier,VP of marketingcommunication,

Gemalto



connectivity are entertainment,traffic, communications andmapping. Further ahead car makersplan to connect cars to a wider‘smart city’ network. This will help to soothe congestionand save energy. It could even leadto self-learning or autonomousvehicles, and yield new businessmodels. Car makers may evolvefrom sellers of goods to providers ofa more holistic transport service.

From dumb to smartThey won’t be alone in having tochange their approach. In virtuallyevery area of industry, makers ofsimple ‘dumb’ devices will have toadjust to the challenge of managing‘living’ goods.

Selling a mechanical front door lockis not the same as maintaining onethat is permanently connected to theInternet and approved users.There are connectivity issues to beconsidered. What’s the best protocolto ensure a reliable connection? Wifiand Bluetooth may work at home,but what works best for the smartmeter in a remote location? Or aturbine in a power station?Cellular is probably the answer here.But not with the traditional SIM cardwe know from phones. It’s why theGSMA developed a specification for

an embedded SIM that can besoldered in to withstand heat, coldand vibration. It reckons mobilehandsets will constitute only 72 percent of cellular connections (it’scurrently 92 per cent) by 2020.Another consideration is security. Aworld of connected devices is, sadly,a world of opportunity for criminalsand mischief-makers. Aremanufacturers ready for this? In thispublication, James Lyne of securityspecialist Sophos, suggests not. Hisown tests reveal a generally poorlevel of protection. But the goodnews is that strong solutions doexist and that, to date, attacks arerare. So there’s still time to act.Of course, all this talk of the futureoverlooks the impact today’stechnologies are still having on ourconnected world.

Contactless at lastNFC is finally making an impact, forexample. Most phones now supportit. And consumers are being easedinto tap-and-pay by the decision ofTransport For London and others toembrace NFC.Merchants and service providers areeven finding new ways to use SMS. Itmay be 20 years old, but text still hasa vital role to play. For example, in aworld of digital services anddocumentation, a simple text passcode sent to your mobile could yoursecurest form of authentication. So-called Mobile ID is already beingrolled out.There’s so much to be excited about.We hope the Gemalto Netsize Guide2015 whets your appetite.

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These new markets require a differentapproach from traditional tech. Inwearables, the design factor isparamount. Simply, people will notwear utilitarian products.



One platform would be just the Thing…The history of tech is littered with platform wars, from VHS v Betamax to IoS vAndroid. So has the vast complexity of the Internet of Things taught allparticipants to sit down and agree on standards? Not so far, writes Tim Green.

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Imagine you’re going to throw aparty, and you invite hundreds ofpeople who speak differentlanguages. Then throw in someguests who have lost their voices.Confusion would reign. It wouldn’tbe a great deal of fun. It’s unlikelyany new business partnerships orromantic alliances would be formed.But this same scenario threatens toslow down the progress of theInternet of Things (IoT).

If you think about it, the IoT is like agrand industrial equivalent of theparty. It involves potentially millionsof machines talking to each other inorder to make human lives better. These devices will be necessarilydiverse. The connected car will tellthe smart heating system to warm aroom to 20 degrees. The smartwashing machine will tell themanufacturer it needs a new part.The smoke alarm could warn the

TThe Internet ofThings is home tomulitiple devices,connection types

and softwarestandards. It’s a

bit of a mess.

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park ranger about forest fire.Of course, all these differentappliances will command differentlevels of power consumption andconnection bandwidth. Some will bealways-on, others will transmit onlyintermittently.But it’s imperative that, regardless oftheir quirks, they can all ’speak’ toeach other. Sy Choudhury, seniordirector of product management forthe Allseen Alliance (see below)says: “We need to make devices thatare truly interoperable. In the smarthome for example, our TVs and otherscreens should be voices for ourappliances.”Unfortunately, this universallanguage is far from established.

Instead, a range of standards arecompeting to define the future of IoT.It’s one reason why the ‘party’ hasyet to really kick off.There are essentially two areas thatneed to be straightened out.The first is the transport layer. Thisdescribes how the IoT deviceconnects with other IoT objects.Options include Bluetooth, wifi,cellular and more. They each vary inrange, power consumption andbandwidth, but obviously they needto interoperate in some way.The second consideration is theapplication layer. This relates to thecodebase built into applications sothat they know how to interpretinformation received from other


devices. There are two main optionshere: Qualcomm’s Alljoyn andSamsung/Intel’s Open InternetConsortium.It’s also worth mentioning a third,the mobile platform, given that thesmartphone will likely be the remotecontrol for much IoT activity.So let’s look at the options:

THE TRANSPORT LAYERBluetooth Smart Bluetooth Smart (previously knownas Bluetooth Low Energy or BLE)extends the short range of Bluetoothand also consumes far less batterypower. It was originally aimed atwearable technology, and shouldbecome prevalent in the smarthome. However, progress in meshnetworking technology could see

Bluetooth leapfrog across devices toconnect to thousands of thingsacross long distances.The tech’s cause is helped by thefact that it is already a feature onsmartphones, which will likely act asthe management hub for connectedhomes. Then there are Bluetooth Beacons.These are the small wirelesssensors placed inside any physicalspace that transmit data to a phone.In a shop, for example, they cantrigger offers as a consumer passesa certain product display or simplywalks through the door.Finally, Bluetooth Smart is regardedas very secure. It uses powerfulencryption to ensure no one canintercept or unscramble commsbetween smart devices.


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Sy Choudhury, ofthe Allseen

Alliance. “We needto make devices

that are trulyinteroperable.”



WifiEveryone knows wifi. Parents withchildren will recognise its centralityto a home life dominated by iPads,laptops and portable games players.Wifi is good for short distance, highenergy connections like musicstreaming and film viewing. But wifi’s ability to handle high-bandwidth makes it power-intensive— watch your laptop battery die ifyou use it for streaming.This is why many smart homeproducts reject wifi: you don’t wantyour smoke alarm running out ofbattery every two days.

ZigBee AllianceZigbee is a low power spin off of wifibased on the IEEE 802.15.4standard. It’s over a decade old andthe Zigbee Alliance comprises morethan 300 companies including giantcorporations like Philips, MitsubishiElectric, Epson and more.Where ZigBee scores is in distanceand power consumption. Devices areusually powered by batteries thathave a life lasting months or evenyears. And they can communicateacross long distances because ofmesh networking. Mesh networks link up multipledevices so that a signal can hopacross them. ZigBee supports up to65,000 nodes on one network. Thisnot only supports long range commsbut it also makes the connectionsmore robust (if one device fails, thesingle still gets through). For this reason Zigbee is betterestablished in industrial sectorsthan the smart home. Analysts say

ZigBee-enabled devices account for74 percent of the market, and will hitmore than 350 million in annualshipments by 2019. But Zigbee facescompetition from Thread…

ThreadThread is a relatively new standarddeveloped by Google's Nest Labs,ARM and Samsung, It is a low-powermesh network built on existingstandards, which means that devicesusing ZigBee et al can easily migrateto it. Existing Thread specificationswill be able to support a network ofup to 250 devices. Thread’s key advantage is that Nestalready uses it, and Nest is the biggorilla of the smart home space.Nest (now owned by Google) is oneof the few firms to have achievedsome genuine consumer adoption.Thread-compatible products won’thit the market until a certificationprogram is launched next year, butdevelopers can start buildingproducts now.

Cellular/GSMA Embedded SIMSpecificationThe mobile operators areunderstandably very keen toembrace the IoT. Now they are closeto connecting every individual in theworld, they are licking theirmetaphorical lips at the prospect ofconnecting billions of devices. Theystarted this process years ago,calling it Machine to Machine (M2M). Demand could be huge. Manyconnected devices are in remotelocations and have simple functions,so they would not be suited to wifi or

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Bluetooth. Indeed, they may onlyneed a 2G connection. So in 2013, the operators’ trade body,the GSMA, launched its EmbeddedSIM initiative. The idea behind thespecification is to allow secure over-the-air operator management ofM2M services. Thus, Embedded SIMs are generallymore hardy than regular SIMs. Theycan be hermetically sealed(especially where devices are placedin wet or hot environments - likesmart meters), which means thecard can’t be swapped. For thisreason, users can manage the SIMremotely. They can even switchoperators this way.The world’s biggest networkoperators (América Móvil, ChinaMobile, KDDI and many more) haveall committed to launch servicesbased on the GSMA specification.

THE APPLICATION LAYERAllSeenQualcomm’s alliance of over 50includes big names like Microsoft,LG, Sharp, Panasonic and Cisco. It isdedicated to evangelising andexploring the use of the AllJoyn opensource project (created byQualcomm, now run by Linux).Alljoyn is a codebase developers canuse to make apps that cancommunicate over any transportlayer without the need for Internetaccess. This software enables functionssuch as discovery of adjacentdevices, pairing, message routingand security. It runs on platforms

such as Linux and Linux-basedAndroid, iOS, and Windows.After a bright start, there wasgrowing suspicion of Qualcomm’smotives for launching AllSeen.Observers wondered if a for-profitcompany should be running a freeopen source project. Qualcommissued a public post saying itwouldn’t make a profit from AllJoyn,but it couldn’t prevent the creation ofa rival consortium: the OpenInterconnect Consortium.

Open Interconnect Consortium The OIC’s main supporters are Inteland Samsung. Like Alljoyn/AllSeen itexists to manage an open sourcecode base that lets developers builddevices that can ‘talk’ to each other. It was launched out of concern thatQualcomm might seek to make aprofit from its open-sourced protocol– or restrict access to some of theIP. For all its opposition toAlljoyn/AllSeen, OIC does address aslightly different market. It’s morefocused on the industrial sector thanthe Qualcomm protocol, which hasmore resonance in the smart home. This is why the OIC announced astrategic liaison agreementwith the IndustrialInternet Consortium(IIC) in February. Thedeal will see the twogroups shareinformation that willhelp fashion anindustrial grade IoTarchitecture.



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SMARTPHONE PLATFORMSApple HomeKitSmartphones are already used asthe ‘remote control’ for someelements of the Internet of Thingssuch as the smart home. Though it’sunlikely they will have a central rolein factories or cities, smartphonesare still a critical factor in theevolution of IoT.Apple knows this, which is why itannounced a software platformcalled Homekit to allow devices,such as web security cameras,smart plugs, thermostats, lights andlocks to be unilaterally controlledfrom one app. It’s part of the iOS 8operating system and it works withSiri too. The platform will in theory saveusers from having to access adifferent app for every smart devicein the home. Instead,they can do itall from HomeKit. So when you tell Siri to “turn on thekitchen lighting,” it will do so,regardless of the make or model ofthe lights. Naturally, Apple wants

manufacturers to badge theirproducts as 'Made for AppleHomeKit’. At time of writingconfirmed Homekit partnersincluded Philips, Osram Sylvania,Texas Instruments and more.

Android™Google has not yet launched anequivalent of iOS Homekit (thoughrumours abound), but it does havevarious initiatives focused atdifferent IoT segments. There isAndroid Wear, for example, whichtailors the OS for watches andwristbands. Meanwhile the AndroidAuto platform does the same for theconnected car. And don’t forget, Google also ownsthe smart thermostat firm Nest(which surely has plans to expandinto other product areas) and hasexperimented with its own wearabledevices – most notably Google Glass.

Samsung TizenIt’s not easy being Samsung. Youmight sell millions of smartphones,but you don’t control the softwareinside them. So Samsung isdesperate to do things differently inthe IoT space. Hence Tizen. This is Samsung’s OSfor the new world of connectedsmart devices. In its favour, theplatform requires less processingpower and memory than most othermobile phone OSs. But Samsung will face an almightybattle to establish the platform insuch a competitive space.

The smart homeis just onemodest part ofthe over IoT. Butthe mobile phonemakers are allover it.

The IoT involves potentially millions ofmachines talking to each other in orderto make human lives better. These appliances will command differentlevels of power consumption andconnection bandwidth. Some will bealways-on, while others will transmitonly intermittently.


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A study by TomTom found driversspend an average of eight workingdays a year in traffic.

No wonder motorists are embracingconnected in-car entertainment,while manufacturers race to buildnetworked transport systems thatcan ease congestion.

In this section we look at howconnected tech can improve the waywe travel.

From Singapore’s effort to create a‘smart city’ to Italy’s experimentswith SMS travel tickets.

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The Gemalto Netsize Guide /// On The Commute

Where next for cars?In-car tech is now the number one factor when people buyautomobiles. No wonder car makers are racing to provide thebest systems and connections.

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Something strange has beenhappening at CES, the giantconvention for gadget freaks. Also atMobile World Congress, the expowhere 90,000 people come to see thelatest phones. Both these hugeevents are suddenly full ofautomobiles. Not in the car parks.On the show floor.Without doubt, cars are the hot newconnected devices. It’s taken a while,but motor manufacturers arerealising it too. In a sense, cars arethey are becoming something likesmartphones on wheels. MarkFields, CEO of Ford, said at CES:“We’re thinking of ourselves as a

mobility company and not only a carand truck company. We want to beviewed as being part of thiscommunity.”Ford was one of ten car makersexhibiting their latest in-cartechnology at the event. And whywouldn’t they, when research byAccenture says 39 per cent of theworld’s consumers value it higherthan anything else when buying anew car. The same survey said just14 per cent care most about powerand handling. In an age when even the cheapestcars are comfortable and reliable,in-car connectivity is the new

Mark Fields, CEOof Ford, says carmakers shouldthink of themselvesas ‘mobility’providers.

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On The Commute /// The Gemalto Netsize Guide

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differentiator for auto makers. Andthere’s serious money in it.According to a report by AlliedMarket Research, the connected carmarket is forecast to reach$141billion by 2020.Some of the impetus for car makersto invest comes from government. InEurope, for example, the EC hasintroduced a 112-based eCall systemthat automatically alerts the nearesthelp service in case of anemergency. It passed a law that sayseCall (according to EuropeanNorms) will be declared mandatoryeffective with all new vehicle typeapprovals by March 2018.

TThe dash to the dashboardBut mostly, car makers are racing towin over consumers. Thebattleground covers these features:

> Entertainment – music, podcasts,radio > Navigation – including street-viewlevel navigation and up-to-datepoints of interest> Automotive diagnosis – oil levels,type pressure, engine diagnostics> Communications – phones andtexts made via Bluetooth > Road side assistance – direct linksto emergency services for break-down calls> Contextual help/offers – displaying

nearby restaurants/fuelstations/parking etc> Connectivity – built in LTE/4Goffering wifi for passengers

Needless to say, they have a varietyof ways to meet these needs. Some,like Audi with its Audi Connectproduct, have built their ownproprietary in-car systems.

Car v phoneThese in-built communicationssystems are necessary fordiagnostics and calling emergencyservices. But entertainment?Phonecalls? Don’t drivers havesmartphones for that? This is the big quandary facing automanufacturers. They don’t want tocede control of their in-car systems,but neither do they want to ignoretheir customers’ preferences. But they will have to face up to thechallenge. Why? Because both Appleand Google are pushing hard into thecar space through, respectively,Apple CarPlay and Android Auto.

Waiting on the platformThese systems give developers astandard platform for updating theirsmartphone apps so they worksafely and fluently inside the car. So,when the driver plugs in a phone tothe car, the display will reveal allsupported apps and let the drivercontrol them by voice or touch.Developers are working on theseupdates, and many car makers aresupporting the two platforms.However, it seems unlikely they will

Research by Accenture says 39 per centof the world’s consumers value in-cartechnology higher than anything elsewhen buying a new vehicle



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By some estimates, half of alldigital transactions now takeplace on a phone or tablet.People simply love to shop ‘onthe go’. So why not shop and payin that other great mobile device:the car?Well, a handful of drivers inCalifornia already can. Early in 2015, card company Visakickstarted a pilot to let driversorder ahead for various itemsdirect from the in-car display.One of the partners is Pizza Hut.Here’s how it works: motoristsassign their Visa card details tothe display and then touch thedisplay to order pizza. The driverchooses a menu item and is thentransported to a shopping cart

with a picture of their Visa cardand a ‘Place Order’ button. After hitting the button, thesoftware reveals a map withturn-by-turn directions to therestaurant and a confirmationmessage stating when the orderwill be ready.When the car arrives, Bluetoothbeacons recognise the driverand transmit his or her locationto the POS, which prepares theorder and takes the payment viaVisa Checkout.Visa hired Accenture to build theapp and enable the partnerships.It’s also working with a parkinggroup and a fuel station.At a demo during Mobile WorldCongress 2015, Martin Enriquez,

Visa’s director of innovation andstrategic partnerships, said theproject is all about finding newways to migrate consumers fromcash to digital.He said: “The Internet of Thingsis going to bring a lot of newopportunities for e-commerce.We’re looking for partners whocan help us make these ideashappen faster.”Enriquez accepts that theemerging IoT is messy andfragmented. However, hebelieves Visa is in a goodposition to marshall variouspartners into mutually beneficialstandards. “We’ve done it withtokenization in the paymentspace,” he says. “We worked

TTHE CONNECTED CAR. YOUR MOBILE PAYMENT DEVICE?

Visa’s new pilot project lets drivers order and pay for pizza and fuel from the dashboard.


Next up – awearable to openyour car door?


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with our competitors to makethat change and it’s working. Ithink we can help here too. Visais not a car company, but I dothink we can work with differentcompanies to make them awareof the opportunity.”Enriquez gives the example offuel ordering. “For this tohappen, the station would needto integrate Beacons and thenrequest information from the carabout the kind of fuel needed,how much fuel the car has leftand what it would cost to fill it.“Now, the car firm may not wantto give all this information, but ifwe can have an openconversation we can work outwhat can be shared so thateveryone benefits. “And once one company doesthis and it works, all the othersmight pay attention and think:we should do this too.”

give up on their own internalsystems. Consumers will just haveto get used to having two options.After all, there’s money in it. Carmakers could conceivably get a cutfrom purchases made in a car. Infact, Visa is working on a pilot forordering food, fuel and parking fromthe car dashboard (see box).

IInternet insideOf course, all of this depends oncars connecting dependably to theInternet. Till recently, this has beenthrough the phone, though upmarketmanufacturers such as Tesla, BMWand Audi offer built-in wifi and 4Gconnections to their cars. This isbeginning to hit the mass market:Chevrolet is installing 4G LTE in

mainstream vehicles like theChevrolet Silverado.

Market boomAnalysts say the trend isaccelerating. Half the cars sold in2017 will have some kind of mobileconnection and by 2022 there will beover a billion connected cars on theroad, says Analysys Mason. Naturally, this is not entirely due tomotorists wanting access toPandora while they drive. The bigger vision is of the intelligentcar sitting within a world in whichsmart cities and homes all talk toeach other – a world in whichairports tell cars when flights aredelayed and drivers set thermostatson the commute home.



Next year’s modelConnected tech could do more than improve in-car entertainment. It could replacecar ownership with car sharing. Or turn vehicle makers into ‘mobility providers’. TheGemalto Netsize Guide looks ahead to a dramatic new era on the road.

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Earlier this year, Audi unveiled itsAudi Key app. As expected from ahigh-end automobile maker, the appis a state-of-the-art demonstrationof what is now possible in theconnected car space. Thus, drivers can use it to see howmuch gas is in the tank, how manymiles to the next service, even wherethe car is. But the most notablefeature of Audi Key may be this: itlets drivers register other people’sphones for use with the car. Thus, at a press of a button,someone other than the owner canwalk up to the vehicle and open itwith an NFC-enabled handset. That sounds cool. But think aboutthe long term implications. If it’s that

easy to assign and revoke car keys,why should everyone need their owncar?There’s no doubt that technologicalprogress is encouraging car makers,government and - of course -citizens to re-consider society’srelationship with the car. Some previously unthinkable ideasare already here. Car sharingcompanies such as Zipcar andCar2go have helped to establish anentirely new market sector, one thatFrost & Sullivan says 26 millionpeople will use by 2020. It seems that a vast swathe of peopleare already happy not to own a car.They certainly have financialincentives for sharing. Frost &

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Sullivan says it’s is around $3,000per year cheaper than buying.And there’s an infrastructural payofftoo. It’s been reported that theaverage car is idle 96 per cent of thetime. Sharing is clearly far moreefficient. Indeed, Frost & Sullivansays that for every car that goes intoa car sharing club, up to nine areremoved from the streets.

Responding to changeCar makers know they have torespond to this shift. BMW launcheda venture with car rental firm Sixtcalled DriveNow, which lets usersfind, unlock and start cars using amobile app, then drive them on acharge per minute basis. There’s nocentral collect and return point sousers can drive where they like andleave the car nearby.Sixt managing director AlexanderSixt proclaimed the scheme to bethe start of a revolution that could“make mobility so cheap that onlythe rich will buy cars”.The transformative potential ofsharing is why Avis bought Zipcar for$500 million in 2013. The purchasecould see Avis re-invent its hirebusiness, replacing brick and mortarunits and fixed parking with a virtualmodel based around the app.

Mobility subscriptions?Jean-Claude Deturche, senior VP ofMobile Financial Services atGemalto, has been working withmajor car companies on connectivityideas. He believes they are allconsidering dramatic new models.“In future you might sign a three

year contract with a car maker toguarantee mobility,” he says. “Theydeliver a car to your house, you useit and then drop it wherever you goready for next driver. But it needn’teven be just about cars. Yourcontract could cover trains, busesand bikes too.”Enabling all of this change is, ofcourse, connected technology. At the center is the evolution of theSIM to suit industrial applicationsand remote provisioning. There’salso the fast roll-out of 3G, 4G/LTE,with 5G on the horizon. And even theemergence of ‘mesh’ networks thatturn every car into its own node onthe network to enable vehicle-to-vehicle and vehicle-to-infrastructurecommunication.

The new driver for hackersThese developments are propellingthe industry towards a momentousendpoint: the autonomous car.It’s exciting. But the path is pavedwith hurdles: If cars get connected,they will almost certainly be hacked,with criminals using phone malwareto exploit holes. While this will be a nuisance if itaffects in-car entertainment, it couldbe life-threatening should a hackergain control of the steering wheel orgas pedal.It’s another area Gemalto is workingon. Deturche says: “The automotivecompanies are investing a lot in thespace, and obviously the mobile iswhere they want to put the keys. Butthese systems have to be highlysecure if they are to open a carworth $50,000.”

Jean-ClaudeDeturche, SeniorVice President ofMobile FinancialServices atGemalto.

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Auto focusWill your smartphone control your in-car systems? Can anautomobile ever be a thing in the Internet of Things? TheGemalto Netsize guide chatted to Mike Bell, global director ofConnected Car at Jaguar Land Rover.

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The automobile industry has come along way since Henry Ford toldcustomers they could have a newModel T Ford in any colour "so longas it is black."Today, the car market is all aboutchoice – dozens of colours, and anycombination of features from powersteering to heated seats.Of course, the ultimate form ofpersonalisation for drivers is lessabout the specs of the car itself thanthe experience they have whenthey’re on a journey: entertainment,

navigation, communication.With the arrival of connectedtechnologies, an exciting new era fordrivers awaits. For manufacturers? Well, it’scomplicated.Auto makers have to decide whetherto build their own in-car systems forconnecting drivers to smart services– or to simply let drivers plug in theirsmartphones. Should they embed aSIM? Connect by wifi? And what kindof interface should they design togive motorists plenty of utility and

Mike Bell, globaldirector ofConnected Car,Jaguar Land Rover

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fun without causing them to crashinto trees?The high-end car maker JaguarLand Rover thinks hard about thesequestions. So the Gemalto NetsizeGuide asked Mike Bell, globaldirector of the firm’s Connected Cardivision, to share his thoughts.

In the past some car makers havebuilt their own systems even thoughdrivers seem to want to use theirphones. How does JLR handle this?Our strategy is based around havingboth built-in connectivity andallowing the car to communicatewith the phone as well. We don’t seethem as separate. The truth is our customers will bringthe devices they want into thevehicle. We know that people place a higherpriority on their choice of phone thanon their choice of vehicle. Lots ofsurveys have shown that. They havean expectation that their phones willjust work, and we support that.

So how does the car sync with thephone?We have an app called InControlTouch, which lets people connecttheir nomadic devices to the vehicle.We have a number of apps – Stitcherand Parkopedia and others – thathave been optimised for our vehiclesand they sit inside InControl.

Another option inside the app isjustDrive. This bundles programslike Spotify, Twitter, and Yelp. Whenyou download these and you plugyour phone into the car, they willcome up on the touchscreen and betailored to work with the car UI. Theygo into landscape mode, and can becontrolled from steering wheel or byvoice activation so you don’t need tolook at the touchscreen. For passengers, we provide wifihotspots too using an antenna onthe roof.

How are these apps adapted towork inside the car?We have an SDK. Developers use itto enable their apps for the systems.We tend to work with apps that areuseful for driving such as apps forparking locations, music streamingand so on. We have around 40 inproduction. It varies by territory, butwe aim to support the top 10 driver-centric apps in every country.

How does this fit alongside Appleand Google’s own in-car platforms(Apple Car and Android Auto)?Like I said, we have to supporteverything. People just expectchoice, so we will work with Appleand Google. At the moment though, Ithink developers find them a bitrestrictive, and anyway there justaren’t many apps available for them.

What about in-car systems thatdon’t involve the phone?We use an embedded SIM. We needsomething that’s automotive gradeso it’s soldered in, and it can

“Our strategy is based around havingboth built-in connectivity and allowingthe car to communicate with the phoneas well. We don’t see them as separate.”


withstand high temperatures andvibration. It’s what we calltelematics, and it’s primarily aboutdriver safety and security really. Inthe event of a crash, the telematicssystem can notify emergencyservices, for example.But it’s also for convenience. Ifyou’re away from the vehicle you cancontrol the in-car system from theAndroid or iOS InControl Remoteapp. You can see the location, fuellevels, diagnostics. You can open thedoors of the car, pre-heat it, keepjourney records for expenses, check

tyre pressure. It will even givewalking directions to the car fromany distance.I think we have to have someinternal systems purely because oflife cycles. Phones are almostdisposable, whereas our vehicleshave to stay on road for 10 years. Youjust won’t expect your phone to workin 10 years. That means the M2M platformshould work for ten years too. Thechallenge comes from factors likethe sunsetting of certaintechnologies. So if, for example, the

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Deep inside a lab in the middle ofEngland, engineers are creatinga living car. OK, not living exactly. Butintelligent enough to pick up ona driver’s choices and journeys,and adapt itself accordingly.In 2014, Jaguar Land Roverstarted work on its self-learning

intelligent car project. Thiscomprises an algorithm thatrecognises who is in the car andlearns their preferences anddriving style. The software then applies this tofactors like calendar, time of day,traffic conditions and theweather. The big idea is that the

car can do all the heavy lifting sothe driver can concentrate on theroad.The intelligent car will recognisedrivers by their smartphones. Asthey sit down, the mirrors,steering wheel, temperature andseat settings will all be set to theindividual's preferences and

AAFTER THE LEARNER DRIVER, HERE COMES THE LEARNER CARJaguar Land Rover is already planning for a future in which a car adapts itself to its owner.

Jaguar LandRover’s self-learning intelligentcar will recognisedrivers beforethey’ve evenopened the door.


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networks turn off 3G, we’d have tolook at making our in-car systemsupgradable. That is something carmakers don’t generally do. It’s a challenge. Some things can bedone over the air. But when it comesdown to the hardware level, it’ssomething we can’t change easily.

How are car makers like JLRpreparing for connecting cars to theInternet of Things?You can argue the vehicle is one ofthe biggest things in the Internet ofThings. So it will play its part.However, you have to ask what arethe use cases: just because I canconnect my car to a fridge, would Iwant to? What helps me on myjourney? What makes sense? We’re looking at the concept of theself-learning car. When the car knows the intent of thedriver, it all becomes more useful. Ifthe car knows I am approaching mylocal supermarket, for example, itcould tell me what I need. The car has to learn this, becauseyou generally don’t set the route forjourneys you take all the time. It’ssome way off though. As it stands,

the Internet of Things uses lots ofdifferent standards. They’re notjoined up, so we will have to chooseour partnerships carefully, and waitto see which platforms getestablished.

Assume these standards emerge,what scenarios could play out?I think smart cities will definitelyemerge. Things like anticipatingtraffic, automated parking andintegrating into other transportsscenarios to make journeys easier.After all, most car journeys alsoinvolve a journey by foot or train orbus and so on.

And what about the smart home?We’re certainly thinking about it. Asfor use cases, I honestly don’t knowyet. Sometimes you just have to takethe ‘build it and they will come’approach. You can’t always askpeople what they want. I remember when Nokia asked theircustomers whether they wantedcameras in phones, most of themsaid no. The truth is people oftendon’t know what they want until theytry it.

external conditions.Other features include:> Destination Prediction -automatic destination based onhistorical usage.> Fuel Assist - suggests fuelstations which have the driver'spreferred brand and location.> Predictive Phone Call -predicts who drivers are likely tocall in a certain situation.> Passenger Awareness - will

detect passengers and offerthem preferred infotainmentsettings > Intelligent Notifications -based on traffic situation, the carcan alert people that the driverwill be late or provide relevantcontextual updates such as flightdelays.> Auto Adaptive Cruise Control -the car applies the preferences ithas learned when the driver is

driving the vehicle. Dr Wolfgang Epple, Director ofResearch and Technology forJaguar Land Rover, is optimisticabout this techno motoringfuture. He says: “It is technologyconcepts like the self-learningcar that will ensure any futureintelligent car remains fun andrewarding to drive as we movecloser to more autonomousdriving over the next 10 years.”

Some car makershave tried to buildtheir own in-carentertainmentsystems. Truth is,drivers want to usetheir phones.


Motor Insurance may not berenowned for its technologyinnovation, but when it comes to theInternet of Things, it’s right out infront. Over the last few years, thebusiness has been experimentingwith new business models such as

usage based insurance, cost per-mile, and pay as you drive. And all ofit enabled by the emergence ofsmart devices and connections.It goes without saying that costsavings and new revenue arepowering these new ideas. In


As smart as you claim?Imagine if your car could tell your insurance company how you’d been driving –and set your payment accordingly. It already can. But this kind of smartmonitoring is just the start, says Matt Owen, MD of M2M Intelligence.

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Pic: Rachel @Flickr

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essence, new technology letsinsurance companies monitor driverperformance more accurately. Andthat means it can reward gooddriving and punish bad habits.This innovation emerges from theability to gather data inside a car,and to transmit this data over the airback to the insurer. Usually thisis done by embedding a SIM card inthe car’s telematics systems, which

sends information via the cellularnetwork. It can even be 2G. Pay As You Drive, the originaltelematics model, began in the US inthe mid 2000s. For the first time itgave insurers data about acustomer’s actual car use. It is asimple concept: if you don’t do manymiles, you don’t pay so much.

PPay how you driveBut measuring miles driven is onlypart of the insurance story. Howthose miles have been driven is whatreally provides adeeper understanding of risk.Historically insurers have only beenable to calculate premiums on broadstereotypical driver profiles, usingproxies such as gender, ageand neighbourhood to put them intobroad buckets. Spreading this risk across the wholebase in each category flattened theimpact of the few bad apples on the

moderate majority, but it leftthe door open for niche competitorsto pick off lucrative segments likethe over 50s. That skewed the demographics andreduced the value of the middlemarket.Regulation made the problemworse. In Europe anti-discriminationlegislation meant that since 2012,insurers could no longer use genderto set premiums. So even thoughyoung women are on average saferdrivers than young men, you can’tcreate a policy only for females. Thismove alone took two per cent off theindustry’s margins.Clearly the industry needed moresophisticated tools to sort the goodfrom the bad. Then it came up withthe idea of Pay How You Drive.The challenge was how to enact it. Afew insurers tried smartphone apps.They monitored the phone’s in-builtaccelerometer and GPS to measureacceleration, braking and cornering. But the idea was easily sidesteppedby boy racers who would leave theiriPhones at home or in Grandma’scar, then go street racing with noeffect on the policy.

Smarter dataSo the insurance industry began tosettle on either hard-wired SIMs orself-installed plug-ins which use thecar’s built-in “OBD” diagnostics portto gather further intelligence.These systems have become highlysophisticated. They can use theaccelerometer to gauge drivingdynamics, and the odometer toassess mileage and time. But the

New technology lets insurance companiesmonitor driver performance moreaccurately. And that means it can rewardgood driving and punish bad habits


cleverest systems now know thespeed limit of the road on which carsare travelling. Some, such as the the UK’s RACAdvance unit, even incorporate crashdetection systems that can tellgenuine collisions from potholes,kerbs and speed humps. One big benefit of these systems toinsurers is that, for the first time,they can get first notification ofincidents in real time, putting themback into the lucrative claimsmanagement process.

NNudging better behaviourBut it’s not all about detectingaccidents and measuring drivingpatterns. These systems can alsofeed back information to motorists inthe hope of nudging them to drivemore safely.In large scale roll-outs cloud-baseddata crunching engines assign ascore for every driver journey andgive back a personalisedoverall rating. Then this score isdelivered to the app, triggeringwarnings and advice or praise andrewards. It’s especially useful in thecorporate “grey” fleets whereemployers have a duty of care tolone workers clocking up the mileson company business.Of course, none of this innovation isof any value unless the connectivityis reliable and ubiquitous. It’s whymany of the larger groupshave moved away from singlenetwork contracts to multi-networkSIMs with better geographicalcoverage and resistance to outages.The move to roaming SIMs is

eroding the traditional pricebarriers, and when the benefits areweighed against the cost, the valueproposition is generally clear cut.

Not just insuranceWith the permission of the driverthere’s little to limit the potential ofthis technology. Once you havehealth-monitoring data onthousands of cars, analytics can addreal value to the user.It’s why the big gains made by carinsurers are now trickling down toother motoring sectors such asbreakdown, repair and maintenance. The RAC sends the vehicles’ faultcodes back to a central databasewhere a big data application cantranslate them into warnings, adviceand intelligence on vehicle health.This too is fed back to the userthrough a smartphone app.How does this help them? Well, itmeans that when they call in with aroadside breakdown the RAC mayalready have a good idea where theyare and what’s wrong with the car. It

can then send the right engineerwith the right parts.Similarly, the insurer can alsopredict with some accuracy when anengine part may need replacing. Thisopens up a world of newrevenue opportunities: when youcan tell 10,000 Ford Focus drivers

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Matt Owen, MD ofM2M Intelligence

The big gains made by car insurers arenow trickling down to other motoringsectors such as breakdown, repairand maintenance


that at 30,000 miles there’s a 70 percent chance they’ll need a newwidget, then you have created apowerful marketplace.

RReal-time maintenenceIt’s already happening in the USwhere connected car specialistZubie recently teamed up with carretailer AutoNation to power real-time vehicle alerts. These relate to engine performance,battery issues and othermaintenance items. It means, forexample, that when a ‘check engine

light' comes on, AutoNation canalert the customer and schedule anappointment.This is just the start of a trend formonetising customer journeys,using real time data to highlightopportunities for special offers viathe smartphone app. It could start with obvioussuggestions such as insuranceextensions for driving overseasbased on GPS feedback. But in timeit may extend to coffee, restaurants,hotels or anything that centresaround the driving experience.


33www.gemalto.com

M2M tools will letinsurers monitorhow people drive.This could rewardsafer motorists.

Pic: State Farm @Flickr



Pic: magro_kr @ Flickr

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For any transport operator oneconsideration overrides all the rest:how to get people on and off a bus ortrain as quick as possible.Paper tickets leave a lot to bedesired. They can be costly andinefficient. Staff need to sell them,which brings with it risks of robberyand embezzlement. Meanwhile, itcan be expensive to buy andmaintain ticket machines todispense them.This is why there’s such hype arounde-tickets that use NFC, Beacons andsmart wristbands. But the truth isthese technologies are not yetmainstream. Should a transport operator wish tomake ticketing more efficient, it willneed something everyone can usetoday. Something simple. Something like SMS.Now, some readers might bethinking: isn't SMS supposed to bedead? Wasn’t it killed by IM,SnapChat and Twitter?Actually, quite the opposite. Whileend users have embraced newmessaging media, enterprises aremore keen than ever on SMS(sometimes called A2P for

‘application to person’). In fact, analyst Ovum predicts thenext few years see A2P volumesincreasing from 1.4 trn in 2013 to2.19 trn by 2018. So why is SMS still growing? It’sbecause text remains the mostimmediate, ubiquitous andaffordable comms tool money canbuy (see box). Simply, it reachesevery mobile user in the world andextends into virtually every location(no need for a data connection).It’s also highly direct: recipients tendto respond instantly to a text. Finally,no consumer education is required:there’s no enrolment process;everyone knows how to send andreceive a text.All of which explains why transportand parking operators have beenexploring the use of text as analternative to ink on paper. SMS tickets combine speedypurchase with improved safety forstaff. Passengers can buy fromanywhere – no need to queue for theticket machine. Or have the correctchange. Plus text is available on anykind of handset – even the oldestfeature phone. And, to repeat, nodata connection is required.Some intermediaries already offerwhat they call mobile ticketing. Butactually they take payment from acredit card. In this scenario, the user

Text is just the ticketEfficient, low cost and ubiquitous…even after all these years, SMS remains acompelling medium for ticketing. That’s why bus companies and parkingoperators across Europe are rolling it out.

With SMS no consumer education isrequired: there’s no enrolment process;everyone knows how to send a text.


must go through a lengthy processof assigning their card to the servicevia the phone to a website or app. However, a much morestraightforward form of text ticketinglets the user simply pay from thephone bill.This simplifies the payment process.All a user has to do is text ashortcode and wait for a text to bereturned. That text is their ticket andtheir phone bill is debited.

Regulatory issuesNow, there is a wrinkle here. And itcomes down to regulation. In the EUat least, there are rules restrictingthe use of the phone bill to pay foranything that’s not a phone call, textor mobile consumable (like aringtone). Any intermediary wishingto bill for something like parkingmay need a financial licence. It is upto the member nation to implementthis requirement locally. To date,only a few countries have required alicence for mobile payments forticketing.One or two firms, such asGemalto/Netsize, are studying thereglatory environment, and theemergence of new ecosystems. They

are applying for licences to supportsome ‘charge to bill’ services.So let’s look at two:

Mobile bus tickets: ATAF ItalyText-based ticketing has beensuccessful for Italian transportoperator ATAF. It launched itsservice in Florence in March 2012backed by all four major telcos inItaly: TIM, Vodafone, Wind and 3. The passenger buys a ticket bytexting a shortcode. The MNO thendeducts the payment from the user'sphone bill and sends back a text.This text contains a validation codewhich is shown to the driver.ATAF uses this system to sell bustickets in many regions. It sold overhalf a million text tickets in the firstfour months of 2014 and says one inten passengers is a mobile user. Andrea Ferrari, operations managerat ATAF/BusItalia, says passengersare delighted with the scheme.“They can buy a ticket any time,anywhere. There are no limits. Andthis has enlarged the base andreduced fraud,” he says.Ferrari adds that the charge-to-billelement of the process has beencrucial to the project’s success.

WWHAT’S SO GREAT ABOUT OLD-SCHOOL SMS? HERE ARE NINE REASONS...

1. Ubiquitous – every mobile user can send and receive texts, regardless of device, OS or network 2. Always on - no data connection required3. Immediate – people respond to texts far quicker than email, for example4. Easy to create – a message contains up to 160 characters, which demands a concise and clear message5. Customisable – messages can draw from an opted-in database to include name, location and more6. Rich – messages can include links to rich content like photos and videos7. Responsive – texts can include calls to action when you want the recipient to respond8. Premium – people value texts, so they are more likely to read and respond9. A channel for payments - consumers can pay with a premium text message


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“With a credit card system, one ofthe main barriers is pre-registration.It is time consuming and peopledon’t feel so secure about it. Phonecredit is so obvious, so simple.”This kind of text-based ticketing isnow available in cities acrossBelgium, France, Holland andFinland. However, in other localitiesregulation restricts it. In Sweden, for example, bus andtrain operators switched from a text-based system to one that requiredpre-registration of a bank card andan app download. Passengers wereunimpressed and transactions fell. Yet even here, the underlyingordering method was still SMS.Developers designed the app to senda message to the phone as validationwhen the user purchased a ticket.

Pay for parking with a textDrivers love SMS ticketing because itfrees them from finding the rightchange or from taking minutes to

enter long credit card details. SMSalso returns more immediacy andflexibility back to motorists, and itcan help them to avoid fines.Typically, the customer sends a textspecifying the duration of the stayand the vehicle registration. Theshortcodes vary by location so theoperator can tell where the car isand what fee to charge.The cost of the ticket is thendeducted from the phone bill, andthe driver is sent an SMS thatdisplays the duration permitted.However, in some cases, themotorist can send a text, whichstarts a meter running. The cost ofthe stay will only last until thecustomer texts ‘stop’. Another optionis for the parking operator to send atext to remind a driver to buy moretime.Companies such as EasyPark arerolling out these services in Sweden,Denmark, Norway, Finland andGermany.


37www.gemalto.com

Pic: LakeWentworth @Flickr



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London Underground is famous allover the world. Every day, peoplemake 12m journeys on the ‘tube’.That’s four billion a year. Gettingthese travellers in and out of theunderground’s 270 stationsefficiently is a huge challenge. Just afew seconds shaved off eachentry/exit can make a hugedifference to the comfort ofpassengers, and the smooth runningof the network.Purchasing and using tickets createsunnecessary hassle for travellers.Meanwhile, for Transport for London(TfL) it is costly and inefficient. Whichis why TfL has pioneered acontactless revolution.It started in 2003 when TfL launchedthe Oyster card. Passengers couldbuy one of these contactless cards,pre-load it with funds, then simplytap to pay at the gate. Oyster was ahuge success, By 2007, it accountedfor over 60 per cent of all tube tripswhile fewer than three per cent ofjourneys were made on single andreturn tickets.By 2012, Oyster accounted for morethan 80 per cent of all journeys, andover 55 million cards had beenissued.For all its success, Oyster does havesome shortcomings. The system


Tube journeys on tapThere’s a contactless revolution going onunderneath London. Every month, passengers onthe Underground pay for 60m journeys with the tapof a bank card. Next up, phones and wristbands.


requires customers to monitor theircards’ funds. It’s also quite complexto maintain. So TfL began examiningalternatives. By 2014 all the majorcard companies had begun issuingcontactless debit cards. It wasobvious that here was the nextphase of tube ticketing.TfL opted for a phased introductionto make it easier for customers toadjust to the change. The initialphase introduced contactless onLondon buses in December 2012,followed by a pilot on the Tube andthe capital’s rail network in April2014.In September 2014, TfL introducedcontactless payments on all forms ofpublic transportation. That includesnot just the Underground, but alsobuses, the Docklands Light Railway,the London Overground and mostNational Rail services in the capital.Travellers could now use anycontactless-enabled bank card to

pay for their journeys. They couldsimply start touching in and out withall cards issued by Visa, MasterCard,Maestro or American Express withthe contactless payment symbol.In the first week, they made morethan a million contactless payments.One of the key benefits of the systemis its simplicity. Visitors don’t need tounderstand the ticketing system, getan Oyster card or top it up – they justneed a contactless bank card. It’s also easier for tourists. Whilethere are some restrictions oninternational cards, visitors from 57countries have so far made use ofthe system. Security is anotherbenefit. TfL says its system issignificantly safer than cash.

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The London underground is now leadingthe UK’s transition to contactless: one inseven ‘tap to pay’ transactions in the UKnow take place on London transport


The overwhelming majority ofcontactless payments made onthe Tube come from a bank orOyster card. But there arealternatives. Users can, of course, pay bymobile – so long as their phoneis NFC-enabled and supports awallet app. As of 2015, there stillaren’t many options. EE offers‘Cash on Tap’ on 18 Androidphones. Meanwhile, Vodafonesupports payment through itsSmartPass app.It’s also possible that paymentscould be made from Apple Payonce the service is launched in

the UK. Then there’s therumoured Android Pay servicefrom Google. If and when thisarrives, that would bringcontactless mobile payment tovirtually any Android device.Another intriguing possibility iswearable payment. A number oforganisations are triallingcontactless wristbands atstadiums and events – and couldextend the concept to wherevercontactless payment is accepted,including the LondonUnderground. Wearabletechnology scores here becauseit’s fast and helps commuters

avoid ‘card clash’, wherereaders detect more than onecontactless card.In most cases the payment onwearable technology is via a pre-paid account to which funds areeither added automatically whenthe balance runs low or whichcan be done manually online.In two pilots, Gemalto (withGuinness and the RFU) testedwearables at the Twickenhamand Saracens Allianz rugbystadiums. The schemesupported payment both insideand outside the two grounds fortransport and retail use.

CONTACTLESS TUBE JOURNEYS: NOT JUST FOR CARDS


41www.gemalto.com

Contactless payment cards areembedded with multiple layers ofsecurity to protect against fraud,boasting the same level of protectionas chip and PIN cards.Needless to say, there have been afew glitches. TfL had to warn people of ‘cardclash’, where the wrong card ischarged because the user holds twocards together at the sensor.

This doesn’t seem to have deterredpassengers. By February 2015, more than 60mjourneys were paid for usingcontactless fares per month, withthe payment method accounting for14 per cent of all pay as you gojourneys.In fact, the underground is nowleading the UK’s transition tocontactless: one in seven ‘tap to pay’transactions in the UK now takeplace on London transport. The Mayor of London Boris Johnsonsays: "London was the first city inthe world to offer passengers theoption of getting from A to B with asimple flourish of a contactlesspayment card."Clearly Londoners and visitors tothe capital have embraced thisinnovative technology - with a millioncard swipes taking place each day aspeople zip around our fine city on TfLservices."

Pilots of contactlesswristbands arealready taking placeat rugby stadiums inthe UK



“We’re not trying tobuild everything.We’re challengingentrepreneurs byasking ‘how wouldyou solve this?’ andthen helping them.”

Steve Leonard,Executive DeputyChairman, InfocommDevelopment Authorityof Singapore

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One of the big barriers to creating atruly connected society isfragmentation. At the device levelthere are different OSs and networktechnologies. More often than not,they don’t work together. That’s bad enough. But then youmove to the infrastructure level,where any effort to establishconnected services requires theapproval of public sector bodies,regulators, government and more.Optimists believe that time will takecare of these hurdles. But onecountry isn’t prepared to wait:Singapore. It has already declaredits aim to become world’s first‘Smart Nation’.

SSupport from the topSingapore is uniquely qualified towill the idea into being. It’seffectively a city state anyway (it’ssmaller that greater Los Angeles)and, for all the country’s free marketsuccess, Singapore’s governmentstill wields significant power.Indeed, Singapore’s prime ministerLee Hsien Loong is driving the idea.At launch he said: “We will makeSingapore a smart nation: enablingsafer, cleaner and greener urbanliving, more transport options, bettercare for the elderly at home; more

responsive public services and moreopportunities for citizenengagement.”

One data backbone for allThe connectivity infrastructurebehind the Smart Nation project isbeing run by The InfocommDevelopment Authority – acombination of telco regulator, techstrategy board and investmentvehicle. The IDA’s ambitious missionaims to connect the whole countryand provide a data backbone thatevery business and publicdepartment can hook into. Here’s how Steve Leonard, executivedeputy chairman of the IDA,describes it: “We have this acronym:E3A. It stands for ‘Everything,Everyone, Everywhere connected Allthe time’. So let’s say, at some pointin the future, your doctor sends youhome in a smart post-operative vestto monitor your wellbeing. That’s notgoing to work if there’s noconnectivity in the elevator or in theunderground.“So our smart nation thesis is tostart with connectivity and thenexplore how we can do cool things inthe sharing economy, in transportand health and so on.”The specifics of the project include a


43www.gemalto.com

Today’s city of tomorrowSingapore is impatient to find out how smart technologies can transform lives.So impatient it’s set itself the goal of becoming the world’s first ‘smart nation’.The Gemalto Netsize Guide spoke to the man leading the effort, Steve Leonard.


Smart Nation Platform that willcapture and collect data via sensorsplaced around Singapore in above-ground ‘aggregation gateway’ boxes.Ultimately, the aim is to crunch thedata to see how systems can bemade more efficient.

CCars, queues and careTrials are already underway. Oneinvolving RF Net, Panasonic, andElixir Technology uses video sensorsto assess the length and flow ofqueues. This info could be sharedback to taxi firms, bus companiesand even passengers. It can alsospeed the development of driverlessvehicles. In fact, Singapore is alreadytesting autonomous cars, openingup 6km of roads for trials.Healthcare is another key focus. Thisis why the Housing and DevelopmentBoard is working on a Smart ElderlyMonitoring Alert System in whichhome sensors can notify caregiversor neighbours when the need arises.However, not all the action will be‘top down’. To encourage citizenparticipation, the government willopen up 11,000 data sets so thepublic can contribute ideas and data.They can participate, for example, inthe Virtual Singapore project todevelop an integrated 3D map withlayers of data and information aboutbuildings, land and the environment.

People powerTo give people the bandwidth to getinvolved, the IDA will launchheterogeneous network (HetNet)trials in lifts, pedestrian walkways,and transit stations later this year.This could help devices switch

between various types of wirelessnetworks and let users roam withfewer losses of connectivity.

State-sponsored nudgesOf course, the state can’t do it all.Leonard agrees and says the IDAwants to nudge the private sector.“We’re not trying to build everything.We’re challenging entrepreneurs byasking ‘how would you solve this?’and then helping them.”This help takes various forms. TheIDA is well-connected, so it couldconnect a medicare startup, forexample, to the minister of health.It’s another benefit of Singapore’srelatively small size.The organisation can also providefinancial support. Its investmentsubsidiary has invested in severalaccelerators. Last year, it beganinvesting in overseas entrepreneurswith a $200m European fund basedin London.

Getting to trust the smart cityThe lasting benefits of a connected, smarter urbanlife hinge on people trusting the digital world, saysGemalto’s VP of Global Marcom Hsin Hau Hanna.


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People tend to get nervous about new digital services.They have obvious questions about security and privacy,And they get annoyed when a great promise only workshalf of the time or in specific places. These issuescreate barriers for most people thinking about adoptingnew ways to pay, travel, receive healthcare or storeprecious data. Cities are getting smarter, but if newservices are to be used by the masses, they need to beaccessed easily – anytime and anywhere. Users mustalso feel protected. Finally, new services should bringgenuine additional benefits. That’s the only way toincentivize people to change – and to win their trust.


This Gemaltoinfographicpresents a

gleaming vision of a connected

urban future.


45www.gemalto.com


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For all the hype around the consumerIoT, the impact of connected techmay be greatest in industry.

Agriculture, utilities, transport,healthcare – every one will betransformed when dumb devicesbecome smart.

In this section we look at how the SIMis evolving to function in challengingindustrial environments. We alsoexamine the security risks posed by anetworked world of things.

And we explore how M2M tech iscoming to the aid of the honey bee.

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The Gemalto Netsize Guide /// At Work

HardwiredWhen it comes to connecting remote devices, you can forget about wifi and Bluetooth.Only cellular will do. But these industrial devices can’t always handle a regularphone SIM. Which is why the GSMA created a special Embedded SIM specification.

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What’s the difference between atraffic light and a smartphone? No,it’s not a joke. It’s a serious question,and a very important one for thefuture of the Internet of Things.Especially for the world’s mobile

network operators.Until recently, MNOs focusedprimarily on phone connections.Their priority was selling SIM cardsto as much of the human race aspossible. But as phone penetration

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neared 100 per cent, the operatorsbegan to consider what else theycould connect. Lucky for them thatthe IoT came along.

The era of M2MBy 2020, the GSMA (the MNO’s tradebody) estimates mobile handsets willconstitute only 72 per cent of allcellular connections (it’s currently 92per cent). It also forecasts machine to machine(M2M) devices will number 14.5

billion by the turn of the decade, with652 million in healthcare, 952 millionin automotive and 7.5 billion insmart cities.At Mobile World Congress 2015, theIoT loomed large. It was noticeablethat this historic mobile show hadbecome as much about cars,watches, meters, lighting systemsand doors as it was about phones.These miscellaneous devices wereeverywhere. And operators want toconnect them.

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Traditionally, the UICC was printed ontoa physical SIM, which made it almostimpossible to replace. An eUICC turnsthis feature into software.


However, watches, doors and – yes –traffic lights are very different fromphones.

Machines are not peopleFirst, they’re not personal: no one isgoing to painstakingly remove thecasing of millions of gas meters andfit a SIM card into a special slotinside, then set them up with asubscription. Second, they are rugged. A trafficlight is outside in all weathers. ItsSIM card needs to be resilient totemperature variation and vibration. What’s more, these industrialobjects generally have a muchlonger life than phones. And their

ownership can change frequentlybetween companies with differentmobile contractual agreements.So, to repeat, a traditional SIM justwon’t do. This is why, in 2013, theGSMA created a specification for theEmbedded SIM.

The provision thingThe most important new feature ofthe Embedded SIM is that it can beremotely provisioned. So a customer can buy thousands ofdevices and manage subscriptionsfrom one dashboard. They can re-program them remotely to workwith the network operator theychoose.

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Switzerland is famous for itswatches, but Limmex doesthings a little differently. Itcombines Swiss engineeringwith a unique service idea:watches that link seamlessly toemergency services. The Limmex watch supportspeople with particular care orsecurity needs – children, VIPs,lone workers, the elderly orindividuals with healthproblems. Wearers can call arelative or emergency responsecentre at the touch of a button.And thanks to built-in GPS, theycan even relay location shouldthe caller be disorientated orunable to speak.The particular challenge forLimmex when building itsproduct was ensuring the watchwould be permanently andreliably connected. The wholesafety proposition failsotherwise. That’s why it worked

with Gemalto to buildconnectivity into the device atthe build stage.Gemalto’s ODC (On-DemandConnectivity) platform providesinstant mobile broadbandconnectivity to newly connecteddevices right out of the box. Thefirm has relationships withmobile operators all over theworld, which means thatLimmex could ship one versionof its watch. No need to createnumerous device variants andprofiles to enable the cellularconnection of devices in aspecific country after they’vebeen deployed to consumers.Instead, just a single productdesign across multiple markets."We work with multipleoperators, producing differentproduct variants for eachcountry and region we serve,"says Dr. Martin Reber, CEO ofLimmex. "With Gemalto's

solution, we can enjoy moreefficient manufacturing, astreamlined supply chain, andthe freedom to quickly andeasily market our productworldwide."Benoît Jouffrey, VP of on-demand connectivity forGemalto, believes ODC hasapplications across the IoTspace. He says: “We’re targetingmanufacturers in the consumerelectronics and M2M space – –and in cars. “All these firms want to simplifythe build process. They canmake the products in a singlelocation, but provide connectivityfor different territories from justone build.”“Our system will recognisewhere the user is, determinewhich operator themanufacturer works with andthen switch on the rightsubscription.”

HOW THE LIMMEX WATCH WAS REMOTELY CONNECTED


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Dr Martin Reber,CEO of Limmex



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This means that Embedded SIMscan also be embedded in an M2Mdevice. Manufacturers can solderthem in so they can ensure severeweather or violent movement.

Spec supportEarlier this year the GSMAconfirmed that more than 20 of theworld’s biggest operators such asChina Mobile, KDDI and Tele2 hadcommitted to the specification. Italso revealed that the nearly 65 per

cent of global M2M connections areserviced by operators deployed orcommitted to the GSMA’s solution.“We believe that our Global SIMsolution, combined with the GSMAEmbedded SIM Specification willdrive rapid adoption of M2Mcommunications worldwide,” saysRandy Bryson, chairman of the M2MWorld Alliance. “By integrating the GSMA EmbeddedSIM Specification, members willprovide robust local, flexible and costeffective support for our customers’diverse M2M and IoT connectivityneeds.”

New marketsFor the operators, this is achallenging development. Yes, theycan use the embedded SIM to openup vast new M2M markets for theirconnections. But they will have tocompete hard to win and maintainthese new customers.Of course, the many new companies suddenly entering themarket for SIMs are faced with anequal challenge: how to transformpreviously dumb devices intoconnected subscription services.

Specialist helpThis is where a specialist firm likeGemalto comes in. Its subscriptionand provisioning services help devicemakers manage the networkoperator profiles on the embeddedSIM. They can also connect devices whenthey are activated for the first time,and ensure the right subscriptionaccording to the choice of thecustomer.

Industrial companies are faced with annew challenge: how to transformpreviously dumb devices into connectedsubscription services.

The Limmex watchcomprises anemergencyservices alert. It’sonly possiblebecause of aspecial SIM.



Trust no thing?Elevator makers never used to worry about hackers. Their products just went upand down. But connected elevators are different. They could give criminals anopportunity to make serious mischief. Welcome to a very new security threat.The Gemalto Netsize Guide asked James Lyne, global head of security researchat Sophos, about the need to secure not just computers, but things.

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In 2013, an American couple werehorrified to find their baby monitorscreaming obscenities at their infantdaughter. Their Internet-connecteddevice had been hijacked by amischievous hacker. The incident was widely reported,and was probably the first time mostpeople had heard of a ‘thing’ being

intercepted this way. It almostcertainly won’t be the last.A world full of connected devicesrepresents a wonderful opportunityto make work and life easier forpeople. And it’s big business too.Gartner says the market will support26 billion devices by 2020, and thatthe sector will generate revenues of

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$300 billion by this time. But everyconnected machine gives mischiefmakers and criminals a chance toattack. Clearly, these devices need tobe secured. However, there’s nodoubt that, as of today, most are not.Last year, HP's security softwareunit tested the popular Internet ofThings devices like lawn sprinklers,alarms and thermostats. It found 70per cent of them contained securityexposures. On average, each devicecontained 25 holes. HP also discovered 80 per cent ofdevices did not require passwords ofsufficient complexity and length,while nine in ten collected at leastone piece of personal information.Also, 70 per cent routinely usedunencrypted network services andtransmitted credentials in plain text.

‘‘Legendarily bad’None of this surprises James Lyne,global head of research at securityspecialist Sophos. He spent manymonths testing connected devicesand has been stunned by the results.Take his experience with a wirelesspower plug connected to a light bulband controlled by a smartphone.“I was horrified to find that you couldconnect and control it with no username and password and control it,”he says. “I wrote a script to turn it onand off 200 times a second. It turnsout that if you do this, the light will

explode. I did this in a hotel roomand the cleaner ran out screaming.”Lyne observes that nearly all deviceshe analysed had similarvulnerabilities.He found CCTV security to be‘legendarily bad’. In a test, he foundon Google a 2005 tool – a bruteforce password tool that triesmillions of passwords a second – toattack one camera.He says: “Most modern computerswill lock you out if you do this. But Igot the password in 30 seconds.Now, in this case at least there wasa password. Most devices use‘password’ or 1234 or nothing.”

Watching the watchersLyne found 540,000 of these camerasonline, and accessed hundreds ofthem in less than an hour. He lookedat a CCTV for a gas station inMalaysia and was able to zoom in onthe chip and PIN reader and tillcode. “It was streaming to theinternet for anyone to see.”In another example, Lyne watched asecurity guard falling asleep whilewatching CCTV.This lack of protection makeshacking ridiculously easy for anymoderately skilled attacker. Lynesays: “These devices require no username, password or cryptic keys.There hasn’t been security like thatin computing for 10 years. Yet wehave this model for devices peopleare using in their homes now.”Lyne stresses that the securitysituation may be terrible, but it’s notirredeemable. It’s more aboutattitudes than technology. He says:

IoT devices require no user name orpassword and contain no cryptic keys.There hasn’t been a security model likethat in computing for over 10 years.


“Users treat these devices like dumbboxes when they are computers.”So why aren’t there more attackssimilar to the baby monitor scare?

TThe path to securityNeedless to say, it comes down tomoney. Lyne says: “The simpleexplanation is that attackers can’tmake money from IoT hacks, or itdoesn’t meet their political goals.They want to go to the computer ormobile where there is money.“But in a week, or a month or year,that might change. So security mustbe a key focus before it’s too late. Itmust learn the lessons Microsoftlearned 10 years ago.”Thankfully, simple fixes wouldinstantly provide excellentprotection. “Take the light switch. Itwould be trivial to exchange a cryptokey with the mobile the first time youconnect to it. The user wouldn’t needto know it was happening. And youcould block users without physicalaccess to the device.“Password brute force protection isone line of code. It’s easy. Everyone

does it. You could cut and paste itfrom Google.”Much of the protection for M2Mdevices will come from thecompanies embedding connectivityinside them. Gemalto, for example,makes a tamper-proof SIM card withsecure element that sits insideconnected devices from cars tosmart meters. The firm also offerssoftware-based security thatprotects and encrypts data sent overthe air by these devices. Laetitia Jay, Gemalto’s vice presidentof M2M solutions and services, saysit’s crucial to make an honestassessment of the security priorities– and that all parties in the chaincollaborate. She says: “Security can be difficultand costly, especially if it hasn’t beena factor before, and when yourpriority is just to get your productout. So the priority is to assess thesecurity need and then secure whatmatters. And it’s important forpeople to work together: if only oneside is thinking about trust, then youcannot secure the full ecosystem.”


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A world of productmanufacturers are suddenlywaking up to the need to protecttheir devices for the first time.It’s daunting. But the truth is that differentM2M devices require differentlevels of security. A smart door,

for example, does notnecessarily need to keepinformation about its usageconfidential. But it does need toensure only authenticated userscan unlock it. Broadly there are four securityfactors to consider.

> Authentication. Does thedevice only allow access toapproved users?> Confidentiality. Is theinformation gathered keptsecret?> Integrity. It is possible tochange any piece of theinformation sent by the device?

ONE SIZE DOESN’T FIT ALLThe security needs of a lawn sprinkler are not the same asa wristband that contains credit card details…

James Lyne, globalhead of securityresearch atSophos, says IoTdevice makersneed to change theway they thinkabout theirproducts.



Who’s watching thewatchers? ConnectedCCTV cameras couldcontain obvioussecurity flaws if notproperly protected.

> Availability. Can the device beprevented from sendinginformation?Every manufacturer has toexamine these considerationsand then take the necessaryprecautions. But this needn’t bea burden. In fact, it could be an opportunityto generate business. Laetitia Jay, Gemalto’s vice

president of M2M solutions andservices, says: “If you have asolution that is safe from attacksyou can connect to otherproviders in the ecosystem.That’s an opportunity to to buildnew business cases.”Gemalto itself sees IoTandmachine to machine security asa priority. In 2015, it formallyacquired SafeNet to strengthen

its own offerings even further.SafeNet’s cryptographictechnology already protects over80 per cent of the world's intra-bank fund transfers. The two companies are nowworking on applying thesecryptographic keys to Gemalto'sportable secure elements – thekind used in connected devicesfrom phones to ‘things’.

“It’s important for people to worktogether: if only one side is thinkingabout trust, then you cannot securethe full ecosystem.”Laetitia Jay, Gemalto’s vice president of M2M solutions



Beecham Research identified 300M2M verticals, but it could be muchmore. It’s a vast potential market,and it needs well-designedconnectivity solutions.

You don’t want consumer gradeSIMs in industrial products. Inconsumer markets you can changea SIM every two years. That’s notpossible in enterprise applications.Also, you can’t be sending engineersout to fix remote smart meters allthe time. It’s not practical.

I believe MIMs could be in everysecond or third product in theworld. Gemalto developed a specialSIM platform for the industrial IoTcalled Machine IdentificationModules. (see box).

We recommend a soldered MIM insome situations. In harshenvironments with high temperatureranges, extreme vibrations andmechanical stress, you needsomething much more robust.

Any organisation that has lots ofremote M2M devices should be ableto manage them centrally. Wecreated SensorLogic ModuleServices to let customers easily

diagnose field issues from onecentral location. It delivers up-to-the-minute data and reportsconnectivity information such as CellID, signal strength and jamming.

Industrial customers are onlyinterested in actionable data. So weremove complexity in theSensorLogic UI. For example, userscan set up an alarm that’s triggeredwhen the network signal strengthgoes below a pre-defined level.

Security is essential in IoT. Youhave to trust the device.Manufacturers should think aboutsecurity very early in developmentprocess. It needs to be there bydesign not hindsight.

80 per cent of security issues are inthe software. Gemalto’s Safenettech is a response to this. It caneven secure individual applicationfeatures by placing a securewrapper around the software.

A connected elevator might connectto different cells at the bottom andthe top. This means that there canbe lots of cell handovers. However,we provide a solution to know whenthe MIM might fail and to address it.

The rise of the machinesWhat’s the best way to connect a meter in the middle of theforest? Or a sensor in a super-hot factory? The industrial IoT –also known as M2M – has different demands from the consumerworld of smart watches and thermostats. So says ManfredKube, Gemalto’s head of M2M segment marketing.

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Some M2M services need LTE. Butothers are perfectly OK with 2G. Youneed a family of solutions.

Device makers should use one MIMacross different countries andMNOs. Our systems let themmanage connections over the air. Sowhen someone switches their deviceon for the first time, it will downloadthe final operator credentials.

Automotive customers are theearly adopters. They’re alreadyusing high bandwidth LTE to enablein-car entertainment, navigation,breakdown calls and more.

People are using industrial IoT topreserve bees. The applications ofM2M are endless (see next page).

WHAT ARE MIMS AND WHY DO WE NEED THEM?

If conventional SIMs are notsuited to the vast range of newconnected machines, what is?Gemalto’s answer is a newplatform called MachineIdentification Modules (MIM). The concept builds on Gemalto’sexisting SIM technology. Like aregular SIM, it secures theidentity of the machine to thecarrier network, and providessecure authentication. But then itgoes further to:

> Survive extremes of vibration,temperature, and humidity> Endure a long life span (around10 years)> Occupy a small footprint > Integrate into industrialmanufacturing processes

The MIM platform, which isavailable in several form factors,is already enabling successfulM2M deployments around theworld.

“In consumer markets you can change aSIM every two years. That’s not possible inenterprise applications.”Manfred Kube, head of M2M segment marketing, Gemalto

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Who would have thought, when theSIM card was first used to connectpeople by phone, that the sametechnology might help to save bees?Unforeseeable, maybe. But today researchers at theUniversity of Minnesota are usingnew cellular connectivity to turnback the destruction of thisessential insect.In the US alone, bee colonies havedeclined by 90 per cent since 1962.One of the problems afflicting beepopulations is the varroa destructormite, which breeds and takes overhives. But it’s extremely difficult toidentify and combat this invader. Beekeepers can use pesticides. But thisis a heavy-handed solution withobvious side-effects.Another solution is to use heat. Byapplying high temperatures at aspecific time, bee keepers cansterilize the mites and halt theirbreeding cycle. The difficulty isknowing when to do it.Marla Spivak, McKnight UniversityProfessor of Apiculture/SocialInsects at the University ofMinnesota, is now using cellularconnectivity to monitor and managethe temperature of beehives. She worked with Gemalto andagricultural tech firm Eltopia tocreate the MiteNot solution. Itcentres around a compostable smartbee hive frame – a screen printed

circuit camouflaged to look and actjust like the real thing.The frame is embedded withsensors to monitor the temperatureof 32 elements that indicate broodstatus and different stages of themite reproductive cycle. Theinformation is sent by Gemalto’sCinterion Module, which acts as acellular gateway to transmit dataover the Internet to Eltopia’s

BeeSafe application. The appmonitors the data and,when thresholds are met,instructs the M2MModule to turn up theheat.Spivak is extremelyhopeful aboutthis radical newsolution. Shesays: “The MiteNotproject holds themost promiseto turn the beecrisis around thanany other idea that hascome along in a very longtime – maybe ever.”

Follow the honeyCould M2M technology help to tackle the decline in honey bee populations? Eltopia,Gemalto and the University of Minnesota created the ‘MiteNot’ project to find out.

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“The MiteNot project holds morepromise to turn the bee crisis aroundthan any other idea that has comealong in a long time.” Marla Spivak, University of Minnesota

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Text if you wantto work betterFor all the rapid advances in messagingtechnology, sometimes all you need issomething tried and tested. That’s whyenterprises are finding new and surprisingways to use SMS.

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What’s the best way to provideinformation to a diverse anddispersed fleet of engineers? You could send email or IM to theirsmartphones. But mobile phonesrequire data connections – whichdon’t typically extend to remotelocations. What’s more, they eat up batterypower.OK, voice calls. But hang on, voicedemands real time humaninteraction. That’s expensive andhard to manage. Also, engineers arefrequently in situations where theyjust cannot take calls.This is why, for more and moreorganisations with remote workers,there’s only one answer: SMS.Only this 23 year old channel isavailable, affordable and capable ofproviding the information needed tocarry out precise instructions.Contrary to perceived wisdom, SMSis still growing. According to Ovum’sMobile Messaging Forecast, it hit anall-time high of 7.7 trillion messagessent in 2014.Of course, it's true that person-to-person messaging is changing.Consumers are embracing new chatapps and social media services thatpromise cheaper and more flexiblemobile comms.But in the A2P space, SMS marcheson. ‘Application-to-person’,messaging describes the use of SMSby enterprises to send texts tocustomers, employees, suppliersand partners.This kind of messaging is explodingwith new use cases. Let’s look at afew…

Pic: US Library of Congress


BBank card PIN codesSending PINs to bank customers by post isan expensive and risky way to transmit highlysensitive information. These PINs are easilystolen. With SMS, banks can send PINs andknow that the information is guaranteed toreach the customer. In fact, they can make the process even saferby experimenting with texts that expire after agiven time – or insist that customers confirmreceipt by sending a text back.In France, the retail bank LCL now issues PINcodes and also uses SMS to send temporarynumbers to cardholders who have forgottentheir PINs when out shopping.

Customer service feedbackOrganisations routinely ask consumers forfeedback. But calls can intrusive, whileletters go ignored. This is another activitywhere the text message wins.In the UK, a major TV broadcaster regularlysends texts to opted-in users after anengineer call-out. It's found that responserates are between five and six times higherthan other types of feedback.

SMS confirmation when buying abroadIn an era of online fraud, banks are extracareful when a card is used overseas.Typically, they will call a cardholder to checkthe purchase is legitimate. However, these calls are expensive to makeand they’re not always answered. A text is quick and cheap because it can siton the phone and therefore doesn't requirean immediate response.

A text to replace online passwordsOnline merchants are conflicted – they wantto make logins quick, but they must alsomake them safe. So they ask for passwords and PINs, whichslow everything down. Worse, people forget

passwords then abandon the transaction.SMS can really help here. Site owners cansend a one-time passcode to a customer'sphone, which they then enter into a box onthe page. This process offers betterprotection because of the combination of'what you know' (the passcode) and what youhave (the phone).

SMS appointment remindersWhen customers/patients/interviewees don'tshow up for their appointments, the costs canbe exorbitant. This is why so manyorganisations now send SMS reminders. Healthcare providers in particular have hadgreat success with text. Indeed, a 2012 USstudy revealed that attendance rates forpatients who received text messagereminders over a four month period were79.2 per cent compared 35.5 per cent forthose who received no reminder.

Voice SMS for the visually impairedIt's now possible to hear a text message.Voice SMS uses text-to-speech technology toconvert an SMS and deliver it as a voice callto the recipient’s mobile.

Track your package SMSOne of the great annoyances of modern life isthe missed delivery. Thankfully, the textmessage is helping to tackle this.Many postal services now let customers textthe tracking number of the parcel to ashortcode, and then receive an SMS with itslocation. They can send further updates of itsprogress. Even better, some companies willtext with a delivery window.

Buying a bus ticketPaper transport tickets can be costly andinefficient. You need staff to sell them – orexpensive machines to dispense them. SMSlets customers buy tickets by sending a text

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to a shortcode. The returned text is theticket, which the passenger then shows tothe driver. Italian company ATAF alreadysells tickets this way in many regions.

EEmergency services Can SMS save lives? In Sweden, LEKAB’sMobile LifeSaver service has providedemergency help to thousands of peoplewith suspected cardiac arrest since 2010.Volunteers trained in CPR sign up and thenreceive text alerts when there is anemergency in their location.

Airline crew communicationsIt’s hard to think of a workforce moredispersed than one employed by a majorairline. Keeping track of these importantemployees is tough.So when there’s a change in schedule, thebest channel for contacting pilot and crewis SMS.Text messages don’t require wi-fi or 3G.They arrive straight to the phone homescreen, so they are usually read at themoment they arrive.Scandinavia’s SAS Airlines uses text to alertis pilots and crew teams to changes inschedule. It’s found SMS to be easily themost effective channel for directcommunication.

Remote field engineersAs previously stated, text is emerging as thebest way to contact a diverse and dispersedfleet of engineers. An enterprise may have thousands ofoperatives from multiple providers - allneeding precise instructions on their dailyschedules, the equipment needed for a job,time of arrival and so on. Text messages let operatives manageschedules for entire fleets from onedashboard.

1. SMS is ubiquitousAnyone with a mobile can use SMS – nomatter what handset, telco, OS or country.

2. SMS is always onText messages are transmitted over thetelco networks, which for the most part,reach across every inhabited location.

3. SMS is immediate Mobile is the most personal of all media.So it's no surprise that users open andrespond to texts so quickly.

4. SMS campaigns are easy to createA text contains just 160 characters.

5. SMS messages can be targetedOpt-in SMS marketing campaigns can betargeted at particular customers.

6. SMS is richA text can display a picture, or even avideo. It can contain a hot link to adedicated landing page.

7. SMS is responsiveAny good promotional campaign has a callto action.

8. SMS is premium The premium cost of SMS actually makesit more attractive as a comms channel.People are more likely to open, read andkeep a text.

9. SMS can be used for paymentsA premium text message reverses thecharge, so the recipient pays for it.

Text appeal: nine reasonswhy we still love SMS


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The Internet of Things is coming to ahome near you. Maybe yours.

In this section we look at the impactof connected technologies on allaspects of our lives away from work.

On the way we shop and bank. Evenon the front door key.

We also take a peek at the evolutionof the watch into a communicationdevice – and see how the linebetween jewellery and wearables isblurring.

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The Gemalto Netsize Guide /// At Leisure

Can technologydisrupt this?

Does your door know it’s you? If smartlock technology takes off, it will. TheGemalto Netsize Guide looks at the newbreed of startups coming for your keys.

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At Leisure /// The Gemalto Netsize Guide

Opinions differ on the subject of thesmart lock. Some say it’s technologyfor its own sake – a solution to aproblem that doesn’t exist. Otherssay it is the inevitable next phase ofhome and workplace access. Indeedmarket watcher NextMarketInsights says the global smart lockmarket will grow from $261 millionin 2014 to $3.6 billion by 2019.So what does a smart lock do?Fundamentally, it recognisesapproved users. More accurately, itrecognises the smartphones ofapproved users. This is especiallyuseful in a workplace where there isstaff turnover and where differentworkers have different permissions. Traditionally, someone had tomanage the distribution of physicalkeys and fobs. With smart locks,they can assign or revoke virtualkeys with the click of a mouse.The access industry has been edgingtowards smart doors for years vianumerical keypads, fobs and smartcards. But the arrival of thesmartphone and short rangewireless connectivity (specificallyBluetooth, wi-fi, Zigbee and NFC)has really propelled the market. Now, a group of companies isworking to bring the technology tothe consumer market. They believethe phone can hold a person’s keysjust as it holds their music, photosand maybe money. Needless to say, big questionsremain. Can this technology make aproperty safer? Or will it make itdrastically more vulnerable? Andwill smart keys exist on their own oras part of a wider smart home

Traditionally, someonehad to manage thedistribution of physicalkeys and fobs. Withsmart locks, they canassign or revokevirtual keys with theclick of a mouse.


system that embraces heating,lighting, alarms and more? Here are the start-ups trying to re-boot your keys…

LLockitron BoltThe $99 Bolt lock completelyreplaces a door’s deadbolt andconnects to phones via Bluetooth. Italso comes with a separate ‘bridge’that connects the lock to the internetso owners can configure it remotely.The Bolt actually records everyinteraction with the lock - even whensomeone knocks on the door orunlocks it mechanically.

AugustAugust’s neat round battery-powered module sits above the old house lock. It connects byBluetooth and recognises any user that’s been given permission to access the house. The door is unlocked as theyapproach. The home owner cangrant virtual keys to friends or eventradespeople – all from the Augustdashboard.

If the engine behind techinnovation is making life easier,why are we still queuing at thehotel check-in? Our roomscontain giant flat screen TVs,remote controlled fireplaces andmotion sensitive lighting. Butwhen we arrive, there’s still a 20minute wait to get the key.It’s one of the big remaining pain

points for the pamperedbusiness traveller. Now,perhaps, with the advent ofsmart connected technologies,it’s finally on the way out.In 2014, the Hilton hotel groupunveiled a new service to digitisethe check-in. Guests can use anapp to choose their room inadvance, and then customisetheir stay by purchasingupgrades and selecting roomservice items. Since all payment information ispre-verified, guests simply pick

up their room key from the frontdesk when they arrive. However,in phase two (scheduled for2016), Hilton will let visitorsopen their rooms with theirsmartphones, so they can bypassreception completely.Geraldine Calpin, senior vicepresident and global head ofdigital at Hilton Worldwide, says:"In a recent study, 84 percent ofbusiness travellers surveyedsaid they wanted the ability tochoose their own room. We aregiving our guests the ability to

Hilton Hotels is preparingto let guests check in byphone before they arrive…

CHECK THIS OUT


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select not just their room type,but the exact location in thehotel, all the way down to theirroom number."Of course, this is somethingairlines have done for years.What’s tricky for hoteliers –especially at the high end – isthe need to retain a humantouch. Still, it seems as if efficiency iswinning over a smile and auniform. Reportedly, severalhotel chains are also working onautomated check-in too.

GGojiThis Indiegogo product comprisesan elegant round device that has avisual LED display. It works byconnecting to the home wifi. Whatmakes it a little different is the in-built camera that will send a phototo the owner to verify who’s at thedoor. It also supports the use of afob for anyone who doesn’t have aphone. It is sold by Staples andWalmart.

Sesame Kickstarter-funded Sesame’s bigthing is ease of installation, which isdone in seconds. Basically, you clip itover any existing lock and it turnsthe key as if a human were doing it.The other differentiator is the knocksensor. Users can designate aunique sequence and then eitherknock their phone or their door tomake it unlock.

Kwikset KevoThe Kevo looks like a regular frontdoor lock. However, it connects toand recognises the smartphone of

any authorised visitor, who touch thekey to open the door. It alsorecognises fobs for those without aphone. The device uses a public-keyinfrastructure system rather thanBluetooth.

NokeFuz’s Noke (pronounced No-key) isnot a front door lock, but a smartpadlock. It uses Bluetoothconnectivity as the unlockingmechanism, activated when thesmartphone is nearby. If the powerdies, Noke has a Quick-Clickfunction that lets owners use aseries of long and short taps tounlock it.

Friday Smart Lock Friday puts the emphasis on anultra-modern aesthetic style, withthe option to buy its pleasingly curvylock in gunmetal, stainless steel andunglazed porcelain. The deviceworks with Apple HomeKit, and willalso connect to Nest so it canlink to the smart connectedthermostat in the home.

Knock knock.Who’s there? It’sthe Kickstarter-funded Sesamesmart lock.



The rise of ShineIn a world of tech companies that can put featuresbefore design, Sonny Vu’s Misfit stands out. Thefirm’s Shine wearable is elegant and discreet. Itfeatures no screen, and its battery lasts for sixmonths. Vu tells the Gemalto Netsize Guide why, in the wearable space, looks matter.

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The technology sector is all overwearables. Whether it’s activitytrackers or smart watches orgoggles, the feeling is that this is avast market waiting to happen. But because this is technology, ahuge proportion of these productsare simply ugly. They put featuresbefore design. And while design isimportant in any product category,it’s doubly so in wearables when theitem is on public display.So when Silicon Valley entrepreneurSonny Vu launched his wearablescompany Misfit in 2011, he did sowith a simple design ethos:“We started with what people wouldwear, and then worked backwards.”In quick time, Vu and his team drewsome immutable conclusions. Thebig one? No screens.“We thought about what peoplewould want on their wrists, and weconcluded that a screen was not it.Most wearables come with onebecause we’re so used to havingscreens on phones. But that’s notthe way to think about it. “If the main purpose of a wearable isto see how well someone isprogressing toward their goal, thereare other ways to do it that don’tinvolve a screen.”

FFriendly circles and lightsThus, Misfit’s first product, theShine, is a sleek metal fitness andactivity tracker. It is a simplealuminium button with no display orbuttons. Instead it has LEDs thatlight up on tapping. Users set alltheir goals – running, walking



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sleeping and so on – on the Shineapp and then use Bluetooth to syncit with the device. It’s very discreet. As stated, thebattery lasts six months and the costis just $99.99.Vu says: “The design language isbased around circles and lights.Circles are friendly and universal.We also wanted the Shine to beflexible, so we made it clippable. Youcan wear it on a wristband, but if youwant you can clip it into a necklace.”In fact, you can wear it in six waysincluding in specially designedsocks. ‘When people tell me they putit on and forget it's there, that’s myfavourite comment that people makeabout Shine,” says Vu.This thinking was all prettyaudacious back in 2012, whenwearables was still an embryonicmarket with plenty of doubters – and

the market was dominated bychunky watches with big screens. But just a few months after launch,Misfit raised over $0.8 million on theback of a Kickstarter campaign.Later, it raised around $7 million andthen a further $15.2 million from VCinvestors.

220,000 storesThe company’s revenues went fromzero to $40m in its first 12 monthsand its products are now distributedin over 20,000 stores.As the company has evolved, Vu hasbecome more convinced that desiretrumps all other factors in thedesign of wearables. This explainsthe decision to team up with luxurybrands Swarovski and Victoria’sSecret on a range of fashionableShine variants. For all it success so far Misfit is,

Sonny Vu’swearable productsnow sell in 20,000stores worldwide

We thought about what peoplewould want on their wrists, andconcluded that a screen was not it.Sonny Vu, founder of Misfit



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somewhat surprisingly, not fixatedon activity tracking. Vu believes thetrue long term potential ofwearables lies with their ability tohelp people interact moreproductively with the physical world.“It’s not all about sensors,” he says.“Charts and graphs? Who cares? Ithink people more interested inbuying products that will actually dostuff for them – make their liveseasier.”

LLightbulb momentTo explore this, Misfit launchedFlash. It’s a less expensive version ofShine that supports connections tophysical objects. They include the Misfit Bolt, aconnected light bulb that lets userspersonalise their home lighting.Users set their preferences on theapp, then use the Flash’s double tap,

Misfit’s stated aimis to make wearabletech so discreetthat people forgetit’s there

triple tap and long tap to control thebulb.Of course, Misfit doesn’t plan tocreate its own lightbulbs, door locksand heating systems forever.Instead, it’s teaming up withmultiple partners to make Flash aremote control for the home.

Partners at homeThese alliances include some of themost progressive companies in thesmart home space: LogitechHarmony for home media and lightcontrols; August Smart Lock tounlock your door; Nest thermostatsand more.The remarkable end point of all thiswill see Misfit focus as much ondata gathering as it does on sellingwearable jewellery. Indeed, the firm already providesmotion and sleep tracking algorithmsto third parties – including some thatare competitors to the Shine. It has anapp for the Pebble Watch, forexample. But surely, having given so muchthought to its Shine and Flashdesigns, Vu wouldn’t want to abandonthe hardware space. Or would he? “Hardware is important,” he says. “Ithelps you pay the rent and it gathersthe data. But a Shine app on Pebblegathers data too.“That said. Different people wantdifferent things. Some people wantShine and some don’t. We’re OKwith that. And there are differentsectors too. “Even if Apple Watch is a massivesuccess, there will be people whowant a $50 device, which Apple willnever make. We will.”



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Pay for anything…with your phone bill?Consumers love the convenience of buying digital goods from the phone bill.Imagine if they could pay for physical goods this way. In EU countries this maybe possible. But it’s complicated.

Until the late 90s mobile phonecredit paid for two things: calls andtexts. Then, along came ringtones,wallpapers and the like, and newitems were added to the bill.This presented a challenge forfinancial regulators. If consumerscould buy ringtones with phonecredit, then why not newspapers orfood or – hypothetically – cars? Suchactivity would turn mobile operatorsinto financial institutions. Andbecause many consumers have‘post-pay’ subscriptions, it wouldeven make them lenders.Suddenly, mobile network operators(MNOs) had the potential to becomequasi-banks. And if they were tobehave like banks, they would needto be regulated.But a telco is a telco and alreadyregulated as such. To enter thefinancial services space would meana huge impact on internal systems,which would have to process twovery different lines of business.

MMaking an exemptionSo telcos lobbied for an exemption tothe 'Payment Services Directive' thatgoverned financial institutions. Thissaid: “As long as consumers usephone credit to pay only for ‘mobile

consumables’, operators and theirpartners would not have to applyfor a licence”. Obviously thatmeant no physical goods.

Licence to billThe trouble with the PSD ruling isthat each EU state interprets theexemption in its own way. Afterall, what is a ‘physical good’?In Italy, for example,consumers can pay for bustickets and bike rentals byphone bill thanks to anextension of the scope of thePSD exemption voted by theItalian Parliament inJanuary 2013. In Germanyand France, regulators haveendorsed some localderogations to the PSD inorder to allow pilots forparking, for example.With no common set ofreferences across the EU, itis difficult to launch charge-to-bill services acrossmultiple member states. And there are otherpotential issues linked tothe telco exemption. ForInstance, could anybusiness set up as a telco

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and claim an exemption? This wouldbe an abuse of the regulations. Andwhat about the paymentintermediaries that work withoperators: are they exempt or not?To address these questions,regulators began working on arevised version of PSD (PSD2), whichwill re-visit what can and cannot bepermitted. This is unlikely to passinto law until 2016 at the earliest. Until this time, there is a way roundthe confusion. As previously stated, amobile operator could itself apply fora financial licence that would solvethe problem. However, the reality isthat telcos cannot justify the timeand cost of acquiring a licence forwhat is essentially a niche business.This is where payment companieslike Netsize come in. They recognizethe huge potential of impulse micro-payments. By obtaining a licence,they could let merchants and telcosexplore new business opportunitieswithin a fully compliant framework.

PPassport pleaseSo this is what Netsize has done. Itapplied for a ‘Payments Institute’licence, which allows it to processtransactions via the phone bill andalso via credit card. For Netsize, the best option for asmooth payment experience is tooffer direct operator billing, whichremoves the need for pre-registration on behalf of theconsumer. For this, a paymentintermediary licence is required. “We’ve seen many times that theneed to enrol is a big barrier,” saysLudovic Maupain, President of the

newly created Netsize Payment SAS.“Consumers like to be able to pay onimpulse, and they can’t do this ifthey have to sign up for a wallet. Thisis why we chose to apply for aPayments Institute licence.”Maupain believes a licence will allowNetsize to offer a compliantframework for a micro-paymenteco-system while managingpayment for all manner of low ticketitems via the phone bill.

With complementsAs stated, the licence will also letNetsize process credit cardtransactions. Traditionally cardpayments and operator billing havebeen viewed in opposition to eachother. However, Netsize’s experienceof handling card payments showedthe two could be highlycomplementary.This is because card payments caninstantly cover multiple geographies,while operator billing offers a bettercheckout flow and reaches‘unbanked’ consumers.Arnaud Dubreuil, PaymentsMarketing Director at Netsize, says:“We see very little cannibalization. Infact, overall revenues are higherwhen both cards and MNO billingare available. Merchants can alsooffer more price points and gointernational more quickly.”

An MNO could apply for a financiallicence. However, the reality is thattelcos cannot justify the time and cost ofacquiring a licence for a niche business.

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Time’s upAre consumers ready for the smartwatch?Do they know why they need one? Tim Greenponders the past, present and future of thishot technology sector.

The arrival of the smartwatch feelslike a pivotal moment both for thetechnology business and forwristwatch makers. Here’s whatDonald Brewer, vice president fortechnology for Fossil, says.“I think its because we are at thispoint of evolutionary leap, where awatch no longer needs to be limitedto simply keeping time. People areready for watches to become afunctional technology element so wecan eliminate the need to carryaround one of the many devices wenow stuff in our pockets.”Sounds about right. But here’s thething. This quote is from 2003, whenFossil was working with Microsoft onthe launch of the latter’s SmartPersonal Objects Technology (SPOT)platform. SPOT was conceived to bring a newlevel of functionality to everydayobjects – and the first to get thetreatment were watches.As history shows, the launch failed.Microsoft closed down SPOT in 2008.The watches were too clunky, thetechnology was limited (noBluetooth or wifi – watches used theFM signal to receive info) andconsumers weren’t prepared pay upto $59 in annual subscriptions to getinformation channels. And so the smartwatch went intohibernation. Was the concept fatallyflawed or just waiting for the righttiming?

TThe wisdom of the crowdThe answer came when Pebblelaunched its hugely successful

Heir to the crown? TheApple Watch finally

launched in 2015.



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Kickstarter crowdfunding campaignin 2012. The unknown startup raisedmore than $10 million by pre-selling70,000 smartwatches in a month.Pebble proved yet again the insistentpull of the smartwatch concept.There’s something magical about it.Maybe it goes right back to DickTracey and Star Trek. Critics said – and still say – that thePebble watches are clunky and verymuch a male-orientated ‘geek’purchase. But what is behind doubtwas the excellence of the startup’stiming. This was the firstsmartwatch of the smartphone era.Pebble’s device was designed tocomplement the smartphone. Moreaccurately, the smartphone app.The Pebble can display basicnotifications – email, text, calls andso on – to save the user the hassle of

fishing out his or her phone. It canalso show the weather, controlphone functions like music and evenswitch off lights. Whether the Pebble was/issuccessful depends on your terms.The firm claims to have sold over 1mwatches. That’s a lot. But, bycomparison, 1.1bn smartphoneswere sold in 2014 alone.

EEnter the big boysNevertheless, Pebble re-ignited theinterest of consumers andmanufacturers in the smartwatch. InOctober 2013, Samsung made thefirst move, stripping down Android topower its Samsung Gear product. Sixmonths later, Google unveiledAndroid Wear as a platform for anyOEM seeking a quick and clean OSfor smartwatches. Android Wear is



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essentially a version of Google Now(Google’s intuitive personalassistant) design for a tiny wrist-based screen. By the end of 2014,devices like the Moto 360 wereshowing what it could do. Without doubt, 2014 saw the

emergence of a genuine smartwatchmarket for the first time. Newentrants piled into the space. Therewere phone makers like LG,Samsung and Sony. There were alsonewcomers seeking to establishfresh market niches.Limmex, a Swiss company, released

a line of watches with an embeddedSIM card and a subscription toemergency services. Then there was France’s Withings,which launched a range of sleekActivité watches designed aroundfitness and activity tracking. Other companies experimented withthe form factor. Kairos Watches T-band, for example, puts smartnotifications and tracking into aremovable strap, so users can keeptheir favourite time piece.2015 also saw mainstream watchmakers confirm plans for the space.AG Heuer started work on productpowered by Intel technology andAndroid Wear, while Swatch alsorevealed plans to go smart.

WWaiting for the mass marketFor all the trade interest insmartwatches, consumer sales havebeen modest. According to tradebody The Smartwatch Group, 89companies sold 6.8 millionsmartwatches in 12 months. Theaverage price of a product was $189to give the market a collective valueof $1.291 billion. That was 82 percent higher than the $711 millionearned in 2013.Pascal Koenig, managing partner ofSmartwatch Group concedes themainstream has yet to adopt thesmartwatch.He says: “While offerings in thewellness and sports market fromcompanies like Garmin, Fitbit,Withings and Polar are based onsolid use cases, the consumermarket has not yet picked up. So far,the mobile phone companies around

For all the trade interest insmartwatches, consumer sales havebeen modest. 89 companies sold 6.8million smartwatches in 12 months



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Google’s operating system AndroidWear have not been able to deliveron their promise. As so many times before, it comesdown to Apple to reach abreakthrough in the consumermarket.” Ah yes, Apple.

AApple timeWhen the Cupertino companyconfirmed it would launch a watch in2014, the dynamics of the businesschanged. Indeed, the SmartwatchGroup expects the size of the marketto grow to $8.7 billion in 2015. That’sseven times bigger than 2014. It saysthe average price of devices will toincrease to $290, again largely dueto the Apple Watch.Needless to say, there are manyreasons to believe Apple will have a

huge impact on the evolution of thesmartwatch. Apple has a long trackrecord of excellence in physicalproduct design and seamless userexperience.But perhaps its biggest advantage isits army of willing developers andconsumers. Apple, like mostmakers, wants the smartwatch to domore than tell the time, monitoractivity and display notifications. Itwants the smartwatch to be a linkbetween digital services and thephysical phone. That means using the watch to openthe doors to hotel rooms, order anUber car, pay for coffee, adjustcentral heating. All of this is notpossible without the participation ofdevelopers – and Apple can rely onthese third parties to launch

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First time visitors to MobileWorld Congress in 2015 mighthave wondered whether it wasreally a ‘mobile’ show at all. Thefloorspace was full of newconnected devices – and theyweren’t all phones. They werecars and wristbands andsmartwatches.Which is why the fashion brandGUESS was among theexhibitors. In 2014, it teamed upwith the watch technologyspecialist Martian to create itsown tech-enhanced range:GUESS Connect. The productswill go on sale later this year.

It was a bold move, one of thefirst by a fashion firm into asmartwatch space dominated bytech firms. But according toTarra Del Chiaro, GUESS’s globalleader of digital marketingstrategy (pictured), this was itselfthe motivation.“I believe there’s a clamour forfashion-led smart watches thatare not made by technologists,”she says. “From what I’ve seen of thedevices so far, the build and thecolours are unremarkable. Ourcustomers want somethingbetter. Especially women, who

have been pretty much ignoredso far – even though 30 per centof men’s watches are actuallybought by females.”

FASHION SENSE MEETS TECH SENSIBILITYTech firms have dominated the smartwatch market to date. But traditional watch makers andfashion firms like GUESS are now making their first moves. The Gemalto Netsize Guide spoke toGUESS’s digital marketing chief Tarra Del Chiaro.

Kairos Watches T-band putsnotifications andtracking into aremovable straprather than the face.



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services. Why? Because thedevelopers know millions of peoplewill buy an Apple Watch.What’s more, Apple knows that itcannot alone unearth creative ideasfor the watch. As history shows, onlytalented programmers can do that.The reason Android and iPhone areso successful is not just because thephones look good. It’s because ofSnapchat and Instagram and AngryBirds and Shazam.

AAfter a fashion Of course, there are major barriersin the way. Battery power is themost-cited. Will people be preparedto charge their watches once, eventwice, a day? And what about the need to tether awatch to smartphone? Experts

suggest this could be a hurdle –especially given compatibility issues.The Apple Watch, after all, will notconnect to an Android phone.Another major issue is fashion.Smartwatches are worn. They are onpublic display. The tech companiesdominating the smartwatch spacemay know about design, butindustrial aesthetics do notnecessarily make for good jewellery(see box). However the future pans out, thesheer amount of effort andinvestment moving into thesmartwatch space suggests we arenow at the start of a brand newproduct category. One that couldfundamentally change the waypeople interact. How exciting is that?

So the five GUESS Connectmodels were designed to lookidentical to a normal timepiece,with the only difference being asmall mono screen that showsnotifications such as texts. They can also control the phone’smusic and camera functions, andthey feature a built-inmicrophone and speaker forhands-free calls and controls.GUESS is gambling on the notionthat fashion-led customers valuethese features but not at theexpense of looks. However, the firm may also haveother more logistical advantagesover tech firms. Distribution forexample. “The tech firms don’t know howto access fashion retailers. Wedo. We have local 15,000distributors in 115 countries,

which could make a bigdifference to us,” says DelChiaro. This coverage will alsohelp GUESS manage customersupport. That’s importantbecause launching a techproduct brings with it new issuesfor a fashion firm. Jewellerydoesn’t go wrong. Tech does. Del Chiaro is honest enough toadmit she doesn’t know howcustomers will respond to

GUESS Connect. However, shesays that the firm is committedto the concept and will evolve itover time to move beyond purenotifications. But what will notchange is the looks-first ethos.“Whatever new features andfunctions we introduce, we willnot compromise on looks. Wewon’t be changing materials orvirtualising the whole face. Thisis a huge opportunity for us.”


NFC contactless: Now Fairly Common? Until fairly recently, many mobileinsiders were pretty rude about NFC.They came up with alternativeexplanations of the acronym. One ofthe more printable of these was: NotFor Consumers. Well, how fast things change. Today,thanks in part to the adoption of thetech by Apple and Samsung, NFCtech is fashionable again. The industry analysts agree thatcontactless is on a tear. According toReports And Markets, the globalNFC will grow at an estimated CAGRof 8.83 per cent from 2014 to 2022 toreach $16.25 billion by 2022. And itpredicts the enabled handset marketwill grow at 55.8 per cent CAGRbetween 2014 and 2019.

Device support IHS estimates that 416 million NFC-enabled mobile phones wereshipped in 2014, and predicts thenumber will rise to 1.2 billion – ortwo out of three mobile phones – by2018. Meanwhile Berg Insightestimates the number of NFC-readyPoint of Sale (POS) terminalsshipped last year at 9.5 million.Needless to say, the launches offlagship handsets like the iPhone 6

and the Samsung Galaxy S6 havehelped NFC’s cause no end. With hindsight it seems obvious thatNFC would eventually find its place.In a mobile market so focused onease-of-use, what could be moresimple than performing an actionwith a mere touch? This is why NFCis particular interesting as atechnology to enable payments andsecure access.

Inflection point Of course, stakeholders need to bealigned to make this happen.Experts believe this is happening. In its recent tech predictions,Deloitte said 2015 will be aninflection point ‘as it will be the firstyear in which the multiple

prerequisites for mainstreamadoption – satisfying financialinstitutions, merchants, consumers,technology vendors and carriers –are sufficiently addressed’.

The age of mobile contactless is here after abreakthrough year for NFC technology.


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In a mobile market so focusedon ease-of-use, what could bemore simple than performingan action with a mere touch?

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Thus, by end 2015, five per cent ofthe 600 to 650 million NFC phoneswill be used at least once a month tomake contactless in-store paymentsat retail outlets. It was 0.5 per centof 500m last year.Deloitte points to improved securityvia tokenisation and biometricauthentication as key to the boom. Itreckons fingerprint ID has becomean everyday action for 100 millionindividuals. The firm expectscontactless payment to be combinedwith other processes at the point oftransaction, such as the redemptionof loyalty points.

It also says the channel could bemade more secure by using locationdata as a security check. Deviationsfrom a normal purchasing locationcould trigger a request for furtherverification, such as PIN entry.This serves as a reminder of theimportance of hardare and softwaresecurity in the story of NFC. Thetruth is, people are still nervousabout keeping their wallets insidetheir phones. It’s why thecombination of tokenization,biometrics and a robust ‘secureelement’ (in the OS or the SIM) willbe so central to its success.

The Galaxy S6supports NFC andincludes an in-builtSamsung Payfeature

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How NFC can helpevery brand ‘go direct’Could a company’s posters, POS material or even packaging connect consumersdirectly to its digital stores? Yes it could, says Tapit. It’s using NFC tags to createa new hybrid of physical and digital commerce.

Since 2008, apps have transformedthe way consumers engage withtheir favourite companies. But nowthere are hundreds of thousands ofapps – and this has led to a bigdiscovery problem. Basically,consumers don’t want to download anew app for every brand they like.

“Enterprises want to forge directrelationships with consumers andthis is a chance for them to do so viatheir own physical assets.”Jamie Conyngham, CEO, Tapit

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Australian firm Tapit thinks it has asolution. The company started out asa specialist in NFC-enabled mobilemarketing. It created an NFCplatform so brands could put a tagon marketing material. When aconsumer tapped on the tag, itwould re-route them to moreproduct information. Tapit worked on campaigns withParamount, Telstra, Coca Cola,Virgin and many more. But thismarketing function is just the startof a more ambitious plan. The nextstep is linking consumers via NFC tothe media owner's mobile e-commerce site. Here they can buydigital content in one click. It’s calledTapit and Buy.Jamie Conyngham. CEO of Tapit,believes the concept could presentbrands with a major newcommercial opportunity. He says: “Enterprises want to forgedirect relationships with consumersand this is a chance for them to doso via their own physical assets.That means they can control themessage and also measureprecisely the return on investmentachieved by their campaigns. It’svery powerful.”“You could imagine a toy brand, forexample, generating extra revenueby selling a game with a brandedproduct. There are so manyopportunities for incrementalrevenue like this. Theseopportunities have always existed,but they’ve been missed because it’sso hard to get people to download anapp or visit a website. NFC gets pastthis. All that’s required is a tap.”

NFC is not the only channelassociated with this kind of instanttransaction. There’s also BluetoothBLE (Beacons) and wifi. However,Conyngham believes NFC is hands-down better. “Beacons requires auser to download an app before itcan work. And it’s a push mediumthat risks interrupting the consumerexperience. Or it can be switched off.NFC doesn’t require a download.And it’s ‘pull’. Every engagement isstarted by the consumer.”In the first phase of the project, Tapitwill help brands sell digital goodscharged to the operator phone bill.It’s worked with Gemalto Netsize tocreate the service, which is ideal forcontent such as e-books, video,music and games. Tapit expectsstrong interest from entertainmentbrands in particular. Gemalto Netsize has connections tohundreds of MNOs worldwide, so thepotential addressable market ishuge. Of course, there arerestrictions. In most countries, thereis a limit on the size of individualtransactions – typically around 30euros. And regulation forbids thesale of physical goods from thephone bill.However, Tapit is preparing for asecond phase of the roll-out inwhich an NFC tap could route theconsumer to a single click creditcard transaction. In this scenario, the consumer couldbuy physical goods of any value.Gemalto Netsize is currentlyapplying for a payments licence thatwould enable it to process creditcard transactions.


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When consumerstap to start the

purchase process,brands can control

the message andmeasure ROI on

campaigns.

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Our mobile numbers are unique. And our phones are always at hand. So couldmobile provide a secure alternative to the password? Jean-Francois Ouillet, vicepresident of mobile security at Gemalto, outlines the potential of mobile ID.

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How many passwords do you have?Are they complicated enough toresist a hacker attack? Can youremember them all? In a world where portable devicescan connect to millions of sites andapps, passwords are just not up tothe job. Our research found peoplehave an average of 25 user namesand password combinations each.We need a trusted and simple way tobypass this unsatisfactory system.Such a solution does exist. It’s calledMobile ID.Here’s how it works: when you wantto log in to a website, you select ‘log

with Mobile ID’ and type your mobilenumber. Your phone instantlydisplays a pop-up screen asking youto enter your Mobile ID personalcode in order to connect to thatwebsite. That’s it: just a few secondsto log in.Mobile ID is secure because itidentifies you not only by what youknow (your Mobile ID personal code),but also by what you have (yourphone). In other words: two factorauthentication. This makes itvirtually impossible for any criminalto pretend to be you. It’s a great way to move us away

Logging out of passwords

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from using insecure passwords. Ofcourse, it’s not the only form of log-in available. There’s also Facebookand Twitter. But there’s no guaranteetheir processes are secure, end toend. They still depend onlogin/password combinations.

One sign-in to rule them allAnother advantage of Mobile ID is itsubiquity (or its potential to be). In2014, the telco trade body, the GSMA,created Mobile Connect to unify allMNOs behind one Mobile IDstandard. Dozens of operators havepledged to support it. In time, thiscould make Mobile Connect auniversal way to sign in.Marie Austenaa, the GSMA’s head ofpersonal data and mobile identity,says: “You don’t need a user nameand password to make a phone call,you just click on the green button.“In the digital world, you need a username and password for every serviceyou access. This is a problem and it’ssomething that the mobile operatorshave the assets to resolve, whetherit’s through the SIM or mechanismslike USSD.”

Building the backboneMNOs can’t do this alone. They needpartners to furnish service providerswith one connection to all telcos.This is where Gemalto comes in. We helped the GSMA draft the specsfor Mobile Connect, and we alreadymanage live Mobile ID services inindividual countries. In time, theseservices will sync to Mobile Connect. In Norway, for example, hundreds of

thousands of bank customers useBankID to sign in to services.Traditionally, they would use a PINPad, which they would often forget totake with them. Now they sign in securely withmobiles instead: the BankID isstored on the SIM card. Participating banks include DnB,Skandiabanken, Eika, Nordea andSparebank1. Overall, Gemaltoconnects more than 500 serviceproviders to Mobile ID worldwide. Another great benefit of Mobile ID isflexibility. People can use basicsecurity for simple access to sites.But when payment is involved, theycan use stronger authentication. Mobile ID can even go as far asproviding users with a legally bindingdigital signature, thanks to anenhanced technology of the kindcurrently used in Finland. But no matter the level of securitybehind the scenes, the essentialuser experience will always remainthe same.

Speedier form fillingMobile ID is not only used for signingin securely. It could also speed upform-filling. In this scenario, a userwould store personal data with themobile operator. Then, when faced with a complexregistration form, he or she couldlog in with Mobile ID and grantpermission to fill in the missingdetails. This would be excellent foreGovernment services, such asapplying for a passport.

Jean-FrancoisOuillet, VP of mobilesecurity at Gemalto

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The newnews thingIn a universally connected world,consumers can subscribe to servicesrather than own physical products.Movies and music are moving this way.Could magazines be next? France’sLeKiosk thinks so.

There are dozens of videos onYouTube featuring toddlersdesperately swiping magazines andcomplaining: this iPad doesn’t work.They all reflect the rapid changethat’s hit print media in the pastdecade. In short, magazines aregoing digital. According to a mediaIDEASreport, digital revenues made upten per cent of the totalperiodical industry in 2009. Lastyear it was 28 per cent. By 2020 itcould be 58 per cent.

Print at the crossroadsIt seems print is going the wayof music and movies. If so,where is print media’s Spotifyand Netflix? Step forward LeKiosk. TheParis-based company alreadyhas over 150,000 subscribersto its digital magazine service.LeKiosk receives PDFs of printmagazines and transformsthem into high-resolution,mobile-friendly publications.

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Users can then access the titlesthrough iOS and Android apps, whichare currently available in France, theUK and Italy. Its catalogue includesover 1,000 titles including Vogue, GQ,Wired and many more.

Pricing re-thinkOf course, digitisation does far morethan make magazines browsable on ascreen. It also changes the nature ofdistribution. Readers can download ane-magazine wherever and wheneverthey like. And keep dozens of titles ontheir devices at any time.This changes the way they want topay. LeKiosk’s pricing structurereflects the fact that that differenttitles have different prices, and thatreaders won’t always want to read thesame publications each month. It’s why LeKiosk gives users theoption to buy magazines individuallyor to purchase a bundle of credits.The bundle depletes as they selectpublications to read.

New models, new UIAri Assuied, chair of LeKiosk(pictured), says: “The best way to buildcustomer loyalty is to create businessmodels. We want to simplify access topayment for our customers. Peopleare very demanding of new products,and if we want engagement fromthem, we need to build the perfectuser interface.”To make things even more convenient,LeKiosk teamed up with Netsize togive readers the chance to pay fromthe phone bill. In 2015, it launchedpartnerships with SFR, Orange and

Bouygues Telecom – France’s threebiggest mobile operators – to letusers buy magazine bundles with oneclick.

Carrier billing opportunityThe arrangement also helps LeKioskreach millions of consumers that donot use a credit or debit card,providing them with a convenientalternative to entering card numbersand personal details into tiny payment

forms. No registration is required andthe user's phone number acts as aunique identifier, allowing one-clickpayment via a 3G or 4G or wi-fi.

“The best way to build customerloyalty is to create a new kind ofbusiness model.”Ari Assuied, founder of LeKiosk

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90-91 Netsize 2015 the future intro_final 02/06/2015 15:48 Page 1

Think about the impact of theautonomous car. Sure, it couldreduce road accidents and easetraffic congestion.

But could it also raise alcoholconsumption? After all – nomotorists, no drink drivingrestrictions.

In this section, two expert analystsponder some of the moreunexpected consequences of ourconnected future.

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The Gemalto Netsize Guide /// The Future

Time for tomorrowIf you think PCs and mobiles have changed your life, get ready for ‘Living Services’.Mark Curtis, chief client officer of digital design agency Fjord from AccentureInterative, looks ahead to a future where uber-connected devices are everywhere.

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I think the third wave of digital isstarting now. We’ve had the desktopage, and then the mobile age –which we’re still in the middle of –and now we’re entering a new stage,which we at Fjord call ‘LivingServices’.We’ve thought carefully about thatname, because we feel that this issomething that goes beyond the‘internet of things’ or even the‘internet of me’. Why? Because the connected futurewill not just be about ‘me’. It willextend into industry, and health and

agriculture. It will reach into allfacets of human activity. So the services we will see created,via sensors embedded intowearables, nearables, PCs, mobilesand TV, will fundamentally be alive.They will change in response tocontext.

Technology that mimics humaninteractionThe digital services we have nowdon’t change shape in real time. Yes,we have online newspapers thatupdate every hour or so. And we can

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The Future /// The Gemalto Netsize Guide

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get a book delivered in 24 hours. Butnone of this is fundamentally lifechanging. If they disappearedtomorrow, it would be irritating butno more.What’s coming next will materiallywill affect our lives. Live streams ofdata will modify the way machinesrespond in real time, the way humanbeings do. If you think about a shopassistant, he or she will respond towhether you’re smiling, whether youhave children, what your pastpurchases were and so on.

The technology will increasinglymimic human behaviourOf course this is deeply challengingat a design level; we just don’t knowhow to do it yet. What we do know isthat technology is moving closer toour bodies. We’ve gone from TVs to desktop PCsto mobiles to wearables. And it maybe that ultimately we locatetechnology inside of us.

Users are readyThe reason this is happening now isreally a function of cost as well astechnology. For example, Amazonhas reduced the cost of usingAmazon Web Services 42 times since

launch. 42! It’s hard to overestimatehow this is changing what the cloudand ubiquitous computing can do. We’re also seeing theindustrialisation of sensors. I think it’s also significant that thereare just enough smart servicesaround that people are starting toget comfortable with the concept.Take smart doors. Hilton Hotels anda few others have now launchedsmart room keys. Today, these doorsaren’t really that smart: you can justopen them with smartphone, that’sall. But what we’re seeing here is thatsomething extremely dumb isgetting a tiny bit smart, andhundreds of thousands of visitorswill be exposed to that. They’ll begin to get comfortable withit. And then the step to smartthermostats and lighting and so onisn’t quite such a big deal.

Simple but critical design issuesThere’s a science of movementaround enabling digital services.Essentially, if you can halve themovement required of a person, youwill be rewarded with their loyalty. I always think of the supermarketself-checkout as an example of this.People hate them, and this isbecause they demand so muchcognitive activity from us. In the end,it’s just easier to get someone elseto do it. There are simple design rules wehave to follow. A useful way to thinkabout this is about the naturalbandwidth of the human body.

“For me, driverless cars will have moreimpact on society than anything else wecan foresee in the era of living services.It will affect almost everything. I cansee huge numbers of people switchingfrom public transport to cars.”


Fundamentally, your speed willdetermine how much richinformation you can consume. If you’re sitting still, you can absorba lot. But if you’re walking and youtry to do too much, you tend to bumpinto lamp posts. This is why, when you want tocommunicate something simple andfast, vibration is often the best way

Mark Curtis, chiefclient officer ofdigital design andinnovation agencyFjord at AccentureInteractive.




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to do it. We used this basic ideawhen we worked with Adidas on itsfitness tracker. When a runner goes past a pre-determined goal, the trackervibrates. Richer info is bettercommunicated to the eyes, but stillneeds to be glance-able. So wecolour-coded it: get a red, and youslow down.For even more complex instructions,you need more than vibration andcolour. With Adidas we used voicecommands relayed via Bluetooth.

An end to the ‘solar system’ with aphone at the centreI don’t think it’s sustainable for thephone to be the remote control foreverything. That’s putting such a heavy workloadon a device with a limited screenreal estate, not to mention batteryissues. For everyday use cases like yourfront door, you might assign that

function to your home screen, butfor all the other irregular things Istruggle to see how you can managethem from the phone. They’ll beharder to navigate. So I think this is why we’ll move fromsomething less like a solar systemwith the phone at the centre andmore like a constellation.

There are some interestingalternatives around. Amazon Dash is a wifi enableddevice that combines barcodescanning and voice recognition sothat householders can assembleshopping lists on the fly – and thenproceed to purchase with one buttonpress. It doesn’t have anydependence on a phone.

The most profound change?Driverless carsFor me, driverless cars will havemore impact on society thananything else we can foresee in theera of Living Services. It will affectalmost everything. I can see huge numbers of peopleswitching from public transport tocars, and that will affect train andbus companies. Parking too.I predict that alcohol consumptionmight go up. The middle aged andmiddle class – who will be able toafford this first – may well startdrinking on their journeys homefrom work or social events. Whywouldn’t they?

Society is facing big moral choicesThere are huge societal changescoming. We need to make choicesaround data. Should we rewardpeople for being healthy and slim,which is also penalising people forbeing fat? Once we have these data streamsavailable, we’ll have to grapple withthese big questions – and haveethical conversations we’re still notreally having.

Fjord chosevibration overvisuals whendesigning theAdidas fitnesstracker.

“Technology is moving closer to ourbodies...we’ve gone from TVs todesktop PCs to mobiles to wearables.And it may be that ultimately we locatetechnology inside of us.”



The thoughts ofa smart watcherBen Wood thinks a lot about wearables. He owns dozens ofthem. The chief of research at CSS Insight mused on thespace for the Netsize Guide.

We are currently in the stone age ofwearables. Most of the devicesshipped today are average or worse.Virtually every product we saw in2014 was designed by engineersthinking purely about how you getdevices on people’s wrists. That’schanging. We’re seeing Guess andOakley and other fashion brandsmaking products that will have someappeal to the ordinary consumer.They’re not perfect, but they’re notgeekware.

Any way you look at AppleWatch, it will be a risingtide. However well it’sreceived, it will sell millionsto its devotees. Apple hasthe knack of finding usecases of tech that make adevice come to life. The physicaldesign is lovely. The software hasclever solutions to difficultproblems. The tricky bit is the apps.But Apple gave the developercommunity six months to come upwith good ideas. And the best ofthose will trickle down to otherdevices, like Android Wear.

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We shouldn’t lose sight of the in-built obsolescence of technology.There are watch brands that markettheir watches as heirlooms you passon to your grandchildren. Smartwatches can never replicate that.

Even my fitness bands requiresoftware upgrades. I am not soconcerned about the challenge ofpeople having to update software intheir wearables.

In subsidised smartphone marketspeople are used to getting phonesfor ‘nothing’. So it will be interestingto see if people are prepared to pay alot of money upfront for these newdevices. That said, people boughttablets without really knowing whythey needed one. I think the samemight be true for wearables. It’s whywe think the industry could sell wellover 20m watches this year.

A smart watch must be glance-able. You have to decide whatinformation is most useful. I thinklinear content like sports news andtravel information will be the firstthings to catch on.

Authentication is an interesting usecase for wearables with passwordsso hard to remember and the needfor multi-factor authentication.Wellness and payments also haveobvious potential too.

Wearables will be complementaryto phones for a long long time. Evendevices that can ‘stand alone’ are notready to work by themselves.

If I were a network operator, Iwould give premium subscribers asmany SIM cards as they want forfree. There’s every chance they’llbuy more data if you give them SIMs.

We may see embedded SIMssoldered in these devices. Thatcould lead could see quitespectacular growth in connectedwearables.

I’ve used Bluetooth headsets tomake calls from a smart watch. Youcan also knock out a short message


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on a wearable. It’s quite easy. Andit’s actually OK to speak into themfor very short calls.

One of the most successfulwearable devices in 2014 was a camera: the GoPro. It sold 5.2m.

Google Glass has done quite a lot of damage to the category.But there is obviously a future for eye wear in industrial verticalmarkets, especially with augmented reality.

Wearables for babies and children is very challenging.There are health issues around cellular devices worn by kids. It might not put parents off, but the distributors may getnervous. So maybe devices for old people or even pets might be abetter bet.

The use of sensors in wearablescould let us track things likephysical attraction. These deviceswill gather new types of data wehaven’t ever collected before.

GoPro was thebiggest sellingwearable of 2013

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100-101 Netsize 2015 Data Intro_final 02/06/2015 15:48 Page 1

Which mobile platform do Canadiansprefer? How often do the French usesports apps? And what are the US’stop mobile destinations?

The answers are all here - in theGemalto Netsize Guide’s much-valued data section.

And there’s an IoT flavour to this setof stats too, with numbers on howthat giant market will grow bydevice, vertical and overall value.

100-101 Netsize 2015 Data Intro_final 02/06/2015 15:48 Page 2

The Gemalto Netsize Guide /// Data

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SSMARTPHONE PENETRATION BY COUNTRY

Country %

EU5................................................................................72.4France ...........................................................................72.6Germany........................................................................71.8Italy ................................................................................55.9Spain .............................................................................86.7UK..................................................................................78.0US..................................................................................76.2Canada ..........................................................................81.2Japan.............................................................................46.9

* Sample of mobile users over 13 years old, December 2014©2015 comScore Inc

The feature phone era is well andtruly over in mature marketsexcept, for the moment, Japan. Inmost other countries, more thanseven in ten people own asmartphone.

MOBILE OEM MARKET SHARES BY COUNTRY

US %

Apple .............................................................................31.3Samsung ......................................................................29.6LG ..................................................................................14.1Motorola .........................................................................6.2Other ...............................................................................5.5Nokia .................................................................................3HTC .................................................................................2.9Kyocera ...........................................................................1.9BlackBerry .....................................................................1.6Pantech ..........................................................................1.2Google ................................................................................1ZTE ..................................................................................0.9Huawei ............................................................................0.5Sony ................................................................................0.3

The US mobile market in 2015 is atwo horse race. Apple andSamsung sell six out of every tenhandsets sold. Nokia - thedominant force just five years ago -languishes with three per cent ofthe market.

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MMOBILE OEM MARKET SHARES BY COUNTRY

Canada %

Samsung ......................................................................33.2Apple ............................................................................31.1BlackBerry .....................................................................7.2LG ...................................................................................6.9Other ..............................................................................5.6Nokia ..............................................................................4.5Google ............................................................................4.3Motorola .........................................................................3.2HTC .................................................................................3.1Kyocera ...........................................................................0.5Sony ................................................................................0.4


Japan %

Apple ............................................................................19.6Sharp ............................................................................19.5Fujitsu ...........................................................................11.5Panasonic .....................................................................10.5Sony ...................................................................................9Kyocera ...........................................................................8.9NEC ................................................................................5.9Other ..............................................................................3.5Samsung ........................................................................3.2Toshiba ...........................................................................2.6Casio ...............................................................................1.8LG ...................................................................................1.3Pantech ..........................................................................0.9HTC .................................................................................0.7Hitachi ............................................................................0.6Sanyo ..............................................................................0.5



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EU5 %

Samsung ......................................................................37.3Nokia ...............................................................................16Apple ............................................................................14.9Sony ................................................................................7.4Other ..............................................................................6.5LG ......................................................................................5HTC .................................................................................3.5Motorola .........................................................................2.4Huawei ...........................................................................1.9Alcatel ............................................................................1.4BlackBerry .....................................................................1.4Google ...............................................................................1Acer ................................................................................0.4Siemens .........................................................................0.3ZTE .................................................................................0.3Sagem ............................................................................0.2


France %

Samsung ......................................................................39.2Nokia ............................................................................13.4Apple ............................................................................15.1Sony ................................................................................7.8Other ..............................................................................8.9LG ...................................................................................4.5HTC .................................................................................2.3Motorola .........................................................................1.6Huawei ...........................................................................0.6Alcatel ............................................................................2.4BlackBerry .....................................................................1.8Google ............................................................................0.7Acer ................................................................................0.9Siemens ............................................................................0ZTE .................................................................................0.2Sagem ............................................................................0.5

The fortunes of handset makersdiffer across the major EUcountries. Samsung leads the way,but behind it the picture varieswildly. In some markets Nokiaremains a force. In others, Applecomes second - even though itdoesn’t make feature phones.



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Germany %

Samsung .........................................................................40Nokia ............................................................................14.8Apple ............................................................................14.3Sony ................................................................................8.3Other ..............................................................................4.6LG ...................................................................................4.6HTC .................................................................................4.8Motorola .........................................................................2.7Huawei ...........................................................................2.2Alcatel ............................................................................0.7BlackBerry .....................................................................0.6Google ............................................................................0.7Acer ................................................................................0.4Siemens .........................................................................0.9ZTE .................................................................................0.1Sagem ............................................................................0.2


Italy %

Samsung ......................................................................39.8Nokia ............................................................................25.2Apple ..............................................................................9.3Sony ................................................................................2.4Other ..............................................................................6.5LG ...................................................................................5.9HTC .................................................................................1.4Motorola .........................................................................2.6Huawei ...........................................................................2.6Alcatel ...............................................................................2BlackBerry .....................................................................0.8Google ............................................................................1.1Acer ................................................................................0.3Siemens .........................................................................0.2ZTE .................................................................................0.1Sagem ............................................................................0.1



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Spain %

Samsung ......................................................................37.1Nokia ..............................................................................8.6Apple ..............................................................................9.4Sony ..............................................................................12.3Other ............................................................................10.1LG ...................................................................................9.4HTC .................................................................................2.8Motorola ............................................................................2Huawei ...........................................................................3.6Alcatel ............................................................................1.4BlackBerry .....................................................................1.1Google ............................................................................1.2Acer ................................................................................0.2Siemens .........................................................................0.1ZTE .................................................................................0.8Sagem ...............................................................................0


UK %

Samsung ......................................................................30.3Nokia ............................................................................16.7Apple ............................................................................24.3Sony ...................................................................................7Other ..............................................................................3.9LG ...................................................................................2.2HTC .................................................................................5.6Motorola ............................................................................3Huawei ..............................................................................1Alcatel ...............................................................................1BlackBerry .....................................................................2.9Google ............................................................................1.3Acer ................................................................................0.2Siemens .........................................................................0.1ZTE .................................................................................0.3Sagem ............................................................................0.2




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SSMARTPHONE MARKET SHARES BY OEM

US %

Apple .............................................................................41.2Samsung .......................................................................29.3LG ....................................................................................8.1Motorola ..........................................................................5.3HTC ..................................................................................3.8Other ...............................................................................3.7Nokia ...............................................................................2.6BlackBerry ......................................................................2.1ZTE ..................................................................................1.1Google ................................................................................1Kyocera ...........................................................................0.8Huawei ............................................................................0.5Sony .................................................................................0.2Pantech ...........................................................................0.2

SMARTPHONE MARKET SHARES BY OEM

Canada %

Apple ............................................................................38.3

Samsung .......................................................................32.4

BlackBerry ......................................................................8.9

Google .............................................................................5.3

Other ...............................................................................3.9

HTC ..................................................................................3.7

LG ....................................................................................2.7

Nokia ...............................................................................2.3

Motorola ..........................................................................2.3

Sony ...................................................................................0.

Kyocera ..............................................................................0

Apple dominates its home territory.Four out of every ten smartphonessold is an iPhone.



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Japan %

Apple .............................................................................41.8

Sharp ................................................................................16

Sony ...............................................................................13.8

Fujitsu .............................................................................8.4

Samsung .........................................................................5.1

Kyocera ...........................................................................3.9

Other ...............................................................................3.8

NEC .................................................................................1.9

Panasonic .......................................................................1.7

HTC .................................................................................1.4

LG ....................................................................................1.4

Toshiba ............................................................................0.6

Pantech ...........................................................................0.1


EU5 %

Samsung........................................................................39.3Apple .............................................................................20.6Nokia ...............................................................................9.2Sony .................................................................................8.5HTC ..................................................................................4.7LG .....................................................................................4.7Other ...............................................................................4.3Huawei .............................................................................2.3BlackBerry .........................................................................2Motorola...........................................................................1.7Google ..............................................................................1.2Alcatel .............................................................................0.8Acer .................................................................................0.4ZTE ...................................................................................0.2



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France %

Samsung........................................................................37.8Apple .............................................................................20.8Nokia .............................................................................10.2Sony ....................................................................................9HTC ...................................................................................3.LG .....................................................................................3.9Other ...............................................................................7.6Huawei .............................................................................0.7BlackBerry ......................................................................2.5Motorola...........................................................................1.3Google ..............................................................................0.8Alcatel .............................................................................1.1Acer .................................................................................1.1ZTE ......................................................................................0


Germany %

Samsung........................................................................43.6Apple ................................................................................20Nokia ...............................................................................7.7Sony .................................................................................8.5HTC ..................................................................................6.5LG........................................................................................4Other ...............................................................................2.7Huawei .............................................................................2.8BlackBerry ......................................................................0.8Motorola...........................................................................1.5Google .................................................................................1Alcatel .............................................................................0.5Acer .................................................................................0.4ZTE ...................................................................................0.2



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Italy %

Samsung........................................................................45.3Apple .............................................................................16.6Nokia .............................................................................14.2Sony .................................................................................3.3HTC ................................................................................2.32LG .....................................................................................5.9Other ...............................................................................3.0Huawei .............................................................................3.6BlackBerry ......................................................................1.4Motorola...........................................................................1.0Google ..............................................................................1.6Alcatel .............................................................................1.3Acer .................................................................................0.4


Spain %

Samsung........................................................................39.5Apple .............................................................................10.9Nokia ...............................................................................5.7Sony ...............................................................................13.3HTC ..................................................................................3.1LG .....................................................................................9.5Other ...............................................................................7.7Huawei ................................................................................4BlackBerry ......................................................................1.2Motorola..............................................................................2Google ..............................................................................1.4Alcatel .............................................................................0.8Acer .................................................................................0.1ZTE ...................................................................................0.7



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UK %

Samsung........................................................................31.8Apple .............................................................................31.2Nokia ...............................................................................9.7Sony .................................................................................7.5HTC ....................................................................................7LG .....................................................................................1.4Other ...............................................................................1.5Huawei ................................................................................1BlackBerry ......................................................................3.7Motorola...........................................................................2.6Google ..............................................................................1.6Alcatel .............................................................................0.4Acer .................................................................................0.2ZTE ...................................................................................0.3* Sample of mobile users over 13 years old, December 2014

©2015 comScore Inc



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SSMARTPHONE MARKET SHARES BY OS

2013 2014US % %Android ............................................50.913............................53.032Apple ................................................42.002............................41.155Microsoft ...........................................3.457 .............................3.569BlackBerry ........................................3.362 ...............................2.06Other Smartphone ............................0.173 .............................0.123Symbian .............................................0.093 .............................0.061

Canada % %Android ............................................44.135............................50.073Apple ................................................36.687............................38.268BlackBerry ......................................15.467 .............................8.916Microsoft ...........................................2.369 .............................2.349Symbian .............................................1.175 .............................0.394............................................................0.168 ......................................

Japan % %Android ............................................57.628............................57.438Apple ................................................41.096............................41.842Microsoft ...........................................1.073 .............................0.538BlackBerry ........................................0.203 .............................0.182

EU 5 % %Android ............................................60.911............................66.377Apple ................................................19.998............................20.553Microsoft ...............................................6.9 .............................7.699Symbian .............................................6.504 .............................2.601BlackBerry ..........................................4.04 .............................1.966Other Smartphone ............................1.647 .............................0.804

France % %Android ............................................56.326............................63.044Apple ................................................21.834 .............................20.78Microsoft ...........................................4.497 .............................8.923Symbian ...............................................6.91 .............................2.253BlackBerry ........................................5.017 .............................2.518Other Smartphone ............................5.415 .............................2.482



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SSMARTPHONE MARKET SHARES BY OS

Germany % %Android ............................................65.396............................69.385Apple ................................................19.463............................19.983Microsoft ...........................................7.541 .............................5.994Symbian .............................................5.085 .............................3.228BlackBerry ........................................1.334 .............................0.826Other Smartp

Italy % %Android ............................................56.276............................66.206Apple ................................................16.577............................16.555Microsoft .........................................13.344............................10.779Symbian .............................................9.591 .............................4.511BlackBerry ........................................2.977 .............................1.425Other Smartphone ............................1.235 .............................0.525

Spain % %Android ............................................75.386............................81.215Apple ...................................................9.54............................10.896Microsoft ...........................................6.933 .............................4.447Symbian .............................................4.217 .............................2.021BlackBerry ........................................3.481 .............................1.243Other Smartphone ............................0.444 .............................0.177

UK % %Android ............................................52.695............................54.319Apple ................................................30.214............................31.197Microsoft ...........................................2.494 .............................9.105Symbian .............................................6.752 .............................1.418BlackBerry ........................................7.502 .............................3.684Other Smartphone ............................0.342 .............................0.278




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SSMARTPHONE ACTIVITY: APPS, SITES AND PAYMENTS

US Target Audience (000) %

Total Audience ....................................................................181508.189 ....................................100Ever in month [Email (Work/Personal)].............................143064.927 ..................................78.82Ever in month [Weather] ....................................................124662.088 ................................68.681Ever in month [Social Networking]....................................120683.551 ................................66.489Ever in month [Search] ......................................................107686.393 ................................59.329Ever in month [Maps/Directions].........................................96828.272 ................................53.347Ever in month [Instant Messaging Service].........................94779.022 ................................52.217Ever in month [Local/World News]........................................89887.06 ................................49.522Ever in month [Watched TV/Video].......................................83234.794 ................................45.857Ever in month [Sports] .........................................................73370.732 ................................40.423Bank Accounts [Ever in Month] ...........................................72095.614 ..................................39.72Entertainment News [Ever in Month] ..................................71427.586 ................................39.352Retail [Ever in Month]...........................................................64245.588 ................................35.395Financial News [Ever in Month]...........................................52435.096 ................................28.889Electronic Payments/Money Transfer [Ever in Month] .......42557.244 ................................23.446


SMARTPHONE ACTIVITY: APPS, SITES AND PAYMENTS

Canada Target Audience (000) %

Total Audience.......................................................................19748.024 ....................................100Ever in month [Email (Work/Personal)] ...............................14897.643................................75.439Ever in month [Weather].......................................................13156.178..................................66.62Ever in month [Social Networking] ......................................12131.811................................61.433Ever in month [Instant Messaging Service] .........................11755.176................................59.526Ever in month [Search] .........................................................11717.694................................59.336Ever in month [Maps/Directions] ...........................................9540.673................................48.312Ever in month [Watched TV/Video] .........................................8537.995................................43.235Ever in month [Local/World News] ........................................8537.451................................43.232Bank Accounts [Ever in Month]................................................7376.35................................37.352Entertainment News [Ever in Month] ....................................6799.132................................34.429Ever in month [Sports]............................................................6708.328..................................33.97Financial News [Ever in Month] .............................................4641.277................................23.502Retail [Ever in Month] .............................................................4332.003................................21.936Electronic Payments/Money Transfer [Ever in Month]..........3337.335 ...................................16.9




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Japan Target Audience (000) %

Total Audience.......................................................................48390.746 ....................................100Ever in month [Email (Work/Personal)] ...............................33795.667................................69.839Ever in month [Weather].......................................................32098.988................................66.333Ever in month [Search] .........................................................28233.527................................58.345Ever in month [Local/World News] ......................................24448.419................................50.523Entertainment News [Ever in Month] ..................................21585.077................................44.606Ever in month [Maps/Directions] .........................................20535.236................................42.436Ever in month [Sports]..........................................................19001.055................................39.266Financial News [Ever in Month] ...........................................18034.228................................37.268Ever in month [Instant Messaging Service] .........................16522.088................................34.143Ever in month [Social Networking] ......................................16163.582................................33.402Retail [Ever in Month] ..........................................................11841.051..................................24.47Ever in month [Watched TV/Video] .........................................9317.792................................19.255Bank Accounts [Ever in Month]..............................................6321.785................................13.064Electronic Payments/Money Transfer [Ever in Month]..........5875.052................................12.141



EU5 Target Audience (000) %

Total Audience.....................................................................175026.345 ....................................100Ever in month [Email (Work/Personal)] .............................119438.509..................................68.24Ever in month [Instant Messaging Service] .........................107782.18................................61.581Ever in month [Weather].......................................................103095.13................................58.903Ever in month [Social Networking] ......................................98081.791................................56.038Ever in month [Search] .........................................................93196.543................................53.247Ever in month [Local/World News] ......................................79315.204................................45.316Ever in month [Maps/Directions] .........................................72017.826................................41.147Ever in month [Watched TV/Video] .........................................70947.33................................40.535Entertainment News [Ever in Month] ..................................60131.319................................34.356Ever in month [Sports]..........................................................59821.995................................34.179Bank Accounts [Ever in Month] ............................................52939.673................................30.247Retail [Ever in Month] ...............................................................47616.3................................27.205Financial News [Ever in Month] ...........................................38397.108................................21.938Electronic Payments/Money Transfer [Ever in Month]..........34246.66................................19.567




www.netsize.com116


France Target Audience (000) %

Total Audience.......................................................................34215.122 ....................................100Ever in month [Email (Work/Personal)] ...............................20928.061................................61.166Ever in month [Weather].......................................................16794.883................................49.086Ever in month [Search] .........................................................17341.852................................50.685Ever in month [Local/World News] ......................................17285.745................................50.521Entertainment News [Ever in Month] ..................................16630.709................................48.606Ever in month [Maps/Directions] .........................................12903.251................................37.712Ever in month [Sports]..........................................................11110.184................................32.472Financial News [Ever in Month] ...........................................10097.486................................29.512Ever in month [Instant Messaging Service] .........................10976.356..................................32.08Ever in month [Social Networking] ........................................9059.777................................26.479Retail [Ever in Month] ...........................................................10871.523................................31.774Ever in month [Watched TV/Video] .........................................5719.737................................16.717Bank Accounts [Ever in Month]..............................................5860.322................................17.128Electronic Payments/Money Transfer [Ever in Month] .............3967.1................................11.595



Germany Target Audience (000) %

Total Audience.......................................................................44249.668 ....................................100Ever in month [Email (Work/Personal)] ...............................29102.601................................65.769Ever in month [Weather].......................................................25656.689................................57.982Ever in month [Search] ........................................................27232.534................................61.543

Ever in month [Local/World News] ......................................20918.231................................47.273Entertainment News [Ever in Month] ..................................21833.026................................49.341Ever in month [Maps/Directions] .........................................18954.314................................42.835Ever in month [Sports]..........................................................17584.198................................39.739Financial News [Ever in Month] ...........................................17179.013................................38.823Ever in month [Instant Messaging Service] ...........................13314.87..................................30.09Ever in month [Social Networking] ......................................14156.743................................31.993Retail [Ever in Month] ...........................................................10581.133................................23.912Ever in month [Watched TV/Video] .......................................13837.744................................31.272Bank Accounts [Ever in Month]................................................8844.76................................19.988Electronic Payments/Money Transfer [Ever in Month]..........8040.149..................................18.17




117www.gemalto.com


Italy Target Audience (000) %

Total Audience.......................................................................25746.638 ....................................100Ever in month [Email (Work/Personal)] ...............................18955.474................................73.623Ever in month [Weather].......................................................19873.766..................................77.19Ever in month [Search] .........................................................16642.646..................................64.64Ever in month [Local/World News] ........................................16404.31................................63.714Entertainment News [Ever in Month] ..................................13101.176................................50.885Ever in month [Maps/Directions] .........................................13519.712................................52.511Ever in month [Sports]..........................................................13068.715................................50.759Financial News [Ever in Month] ...........................................13843.156................................53.767Ever in month [Instant Messaging Service] .........................10253.067................................39.823Ever in month [Social Networking] ......................................10455.931................................40.611Retail [Ever in Month] .............................................................6558.671................................25.474Ever in month [Watched TV/Video] .........................................8056.503................................31.291Bank Accounts [Ever in Month]..............................................7257.392................................28.188Electronic Payments/Money Transfer [Ever in Month]..........7140.933................................27.735



Spain Target Audience (000) %

Total Audience.......................................................................31200.596 ....................................100Ever in month [Email (Work/Personal)] ...............................21435.616................................68.703Ever in month [Weather].......................................................22238.704................................71.277Ever in month [Search] .........................................................18375.631................................58.895Ever in month [Local/World News] ......................................18869.229................................60.477Entertainment News [Ever in Month] ..................................18634.742................................59.726Ever in month [Maps/Directions] .........................................14164.549................................45.398Ever in month [Sports]..........................................................14129.454................................45.286Financial News [Ever in Month] ...........................................14670.952................................47.021Ever in month [Instant Messaging Service] .........................11075.801................................35.499Ever in month [Social Networking] ........................................11667.97................................37.397Retail [Ever in Month] ...........................................................11437.195................................36.657Ever in month [Watched TV/Video] .........................................5677.041................................18.195Bank Accounts [Ever in Month]..............................................8017.805................................25.698Electronic Payments/Money Transfer [Ever in Month]..........6688.826................................21.438




www.netsize.com118


UK Target Audience (000) %

Total Audience ........................................................................39614.32 ....................................100Ever in month [Email (Work/Personal)] ...............................29016.757................................73.248Ever in month [Weather].......................................................23218.138..................................58.61Ever in month [Search] .........................................................23502.466................................59.328Ever in month [Local/World News] .....................................24604.276..................................62.11Entertainment News [Ever in Month] ..................................22996.889................................58.052Ever in month [Maps/Directions] .........................................19773.378................................49.915Ever in month [Sports]..........................................................16125.274................................40.706Financial News [Ever in Month] ...........................................15156.723................................38.261Ever in month [Instant Messaging Service] .........................14511.224................................36.631Ever in month [Social Networking] ......................................14481.574................................36.556Retail [Ever in Month] .............................................................13491.15................................34.056Ever in month [Watched TV/Video] .......................................14325.275................................36.162Bank Accounts [Ever in Month]..............................................8416.829................................21.247Electronic Payments/Money Transfer [Ever in Month]..........8409.652................................21.229

©2015 comScore Inc



119www.gemalto.com

TTOP 50 MULTI-PLATFORM PROPERTIES (US) - APRIL 2015

Property Unique visitors - desktop and mobile (000s)

Total Audience .....................................................................................................257,879

1 Google Sites ................................................................................................................243,067

2 Yahoo Sites ..................................................................................................................213,365

3 Facebook .....................................................................................................................211,982

4 Amazon Sites ..............................................................................................................178,318

5 Microsoft Sites ............................................................................................................173,421

6 AOL, Inc. ......................................................................................................................170,447

7 Mode Media (formerly Glam Media) ...........................................................................152,080

8 Apple Inc......................................................................................................................140,433

9 Comcast NBCUniversal ..............................................................................................135,298

10 CBS Interactive ...........................................................................................................134,785

11 eBay.............................................................................................................................125,921

12 Wikimedia Foundation Sites .......................................................................................119,678

13 Gannett Sites...............................................................................................................115,612

14 Linkedin.......................................................................................................................115,427

15 Turner Digital ..............................................................................................................115,400

16 Time Inc. Network (U.S)..............................................................................................106,632

17 Twitter.com..................................................................................................................102,013

18 Weather Company, The .................................................................................................98,464

19 Hearst Corporation .......................................................................................................89,721

20 Pandora.com.................................................................................................................86,231

21 Yelp ................................................................................................................................84,994

22 About .............................................................................................................................84,521

23 Wal-Mart .......................................................................................................................81,988

24 SheKnows Media...........................................................................................................80,904

25 WebMD Health ..............................................................................................................77,387



www.netsize.com120

TTOP 50 MULTI-PLATFORM PROPERTIES (US) - APRIL 2015 CONTD...

26 BuzzFeed.com...............................................................................................................76,718

27 Pinterest.com................................................................................................................76,640

28 Conde Nast Digital ........................................................................................................75,951

29 Answers.com Sites .......................................................................................................75,598

30 ESPN .............................................................................................................................75,508

31 WordPress.com* ...........................................................................................................71,636

32 Mail Online / Daily Mail .................................................................................................67,615

33 Zillow Inc. Sites .............................................................................................................65,461

34 craigslist, inc. ................................................................................................................63,474

35 Viacom Digital ...............................................................................................................62,523

36 Meredith Digital ............................................................................................................62,251

37 TripAdvisor Inc. .............................................................................................................59,684

38 New York Times Digital.................................................................................................59,333

39 Demand Media ..............................................................................................................58,572

40 Scripps Networks Interactive Inc. ................................................................................58,511

41 Netflix.com....................................................................................................................58,222

42 Adobe Sites ...................................................................................................................57,930

43 Ask Network..................................................................................................................56,668

44 Vimeo.............................................................................................................................54,825

45 Cox Enterprises Inc.......................................................................................................53,617

46 Vox Media ......................................................................................................................53,208

47 iHeartRadio Network ....................................................................................................53,056

48 YP Sites..........................................................................................................................52,915

49 Fox News Digital Network ............................................................................................52,001

50 Gawker Media ...............................................................................................................51,594

©2015 comScore Inc



121www.gemalto.com

TTOP 20 DIGITAL MEDIA PROPERTIES BY UNIQUE VISITORS (UK) - MARCH 2015

Property visitors (000s) % share mobile and PC

Total Internet Audience 47,523 72

1 Google Sites.................................................45,988 .............................................................66

2 BBC Sites.....................................................40,608 .............................................................33

3 Facebook......................................................40,576 .............................................................55

4 Microsoft Sites.............................................37,119 .............................................................36

5 Amazon Sites...............................................36,712 .............................................................33

6 Yahoo Sites...................................................32,421 .............................................................38

7 eBay .............................................................31,415 .............................................................37

8 Mail Online...................................................28,121 .............................................................21

9 Sky Sites ......................................................27,437 .............................................................19

10 Apple Inc. .....................................................27,339 .............................................................13

11 Wikimedia Foundation Sites .......................26,449 .............................................................26

12 Mode Media .................................................24,272 .............................................................16

13 Trinity Mirror Group.....................................23,333 .............................................................11

14 AOL, Inc........................................................22,052 .............................................................25

15 Twitter.com ..................................................21,612 .............................................................18

16 Linkedin .......................................................21,379 .............................................................18

17 The Guardian ...............................................19,200 .............................................................20

18 Telegraph Media Group...............................18,830 .............................................................17

19 GOV.UK.........................................................16,449 .............................................................15

20 Tesco Stores ................................................14,903 .............................................................19

©2015 comScore Inc



www.netsize.com122

TTHE INTERNET OF THINGS: INSTALLED BASE BY CATEGORY

2014 2015 2020

millions millions millions

Automotive .................................189.6 .....................................372.3 ....................................3511.1

Consumer ..................................2244.5 ...................................2874.9 ................................13172.5

Generic Business.......................479.4 .....................................623.9 ....................................5158.6

Vertical Business.......................836.5 .....................................1009.4 ..................................3164.4

Total.........................................3750....................................4880....................................25006

source: Gartner

THE INTERNET OF THINGS: % VALUE BY CATEGORY

Total value .............................................................$1.9trn

Manufacturing ...................................................................15

Healthcare .........................................................................15

Insurance ...........................................................................11

Banking and securities......................................................10

Retail and wholesale ...........................................................8

Computing ...........................................................................8

Transport .............................................................................7

Government .........................................................................6

Utilities.................................................................................5

Real Estate...........................................................................4

Agriculture ...........................................................................4

Other ....................................................................................3

source: Gartner



123www.gemalto.com

MMARKET FOR SMARTWATCHES AND HEALTH/FITNESS TRACKERS

Smartwatch Health and Fitness Trackers2014 2015 2014 2015

units (m) units (m) units (m) units (m)

Western Europe..................0.8............................5.4.....................4 .........................................7.1APAC ...................................0.8............................5.3.....................2.5 ......................................4.5N America ..........................1.2............................7.4.....................4.8 ......................................8.5Developed Regions.............2.8..........................18.1.....................11.3 ..................................20.1C&E Europe........................0.2............................1.3.....................0.6 ......................................1.1China...................................0.5............................3.6.....................0.9 ......................................2.3Emerging APAC..................0.2............................1.4.....................0.2 ......................................0.4S America ...........................0.1............................0.6.....................0.2 ......................................0.5Midle East and Africa .........0.2............................1.1.....................0.3 ......................................0.6Emerging Regions..............1.2...............................8.....................2.2 ......................................4.9

Global 4 26.1 13.5 25source: GfK

WEARABLE DEVICE SHIPMENTS

Category 2014 2015 2019

Wristwear .......17.7.........90.4..........................40.7 ..............89.2.......................101.4 .............80.4Modular ..........1.6.............8.3..........................2.6..................5.7.......................6.7 ...................5.3Clothing ..........0 ...............0.1..........................0.2..................0.4.......................5.6 ...................4.5Eyewear ..........0.1.............0.3..........................1.....................2.2.......................4.5 ...................3.5Earwear ..........0 ...............0.1..........................0.1..................0.1.......................0.6 ...................0.5Other...............0.2.............0.9..........................1.1..................2.4.......................7.3 ...................5.8

Total 19.6 100 45.7 100 126.1 100

source: IDC quarterly wearable device tracker

units(millions)

% ofmarket

units(millions)

% ofmarket

units(millions)

% ofmarket



www.netsize.com124

CCELLULAR M2M AS A PERCENTAGE OF TOTAL MOBILE CONNECTIONS

Q2 2014 Q4 2020

% %

North America................................................................10.5 ......................................................27

Europe ............................................................................6.8 .....................................................20.4

Asia Pacific .....................................................................2.4 .......................................................8.8

Latin America.................................................................2.1 .......................................................6.9

CIS ..................................................................................2 ..........................................................8.3

MENA..............................................................................1.2 .......................................................3.7

Sub-Saharan Africa .......................................................1.2 .......................................................2.9

World ..............................................................................3 ..........................................................9.7

source: GSMA

SMART CITY CONNECTED DEVICE VOLUMES

Category 2015 2016 2017

units (millions) units (millions) units (millions)

Healthcare ........................................9.7 .....................................15...........................................23.4

Public services..................................97.8 ...................................126.4 ....................................159.5

Smart commercial buildings............206.2 .................................354.6 ....................................648.1

Smart homes ....................................294.2 .................................586.1 .....................................1067

Transport...........................................237.2 .................................298.9.......................................371

Utilities ..............................................252 ....................................304.9 ....................................371.1

Other .................................................10.2 ...................................18.4........................................33.9

Total 1107.3 1704.2 2674

Source: Gartner


Acknowledgements /// The Gemalto Netsize Guide

www.netsize.com 125

design. print. online.

155creative

PPublished by:Gemalto N.V 6 rue de la Verrerie, 92197 Meudon Cedex, France

Editors: Jane StracheyHead of Marketing Communications, Netsize

Tim GreenEditor in chief, Mobile Money Revolutionwww.mobilemoneyrevolution.co.uk@timgreen64

Design and layout:155 [email protected]

Data:Thanks to comScore, GSMA, GfK, Beecham, CCS, Gartner

Photo credits: Creative commons, Fotolia. Photos and images supplied by theinterviewees are published under their responsibility.

Acknowledgements:Many thanks to the interviewees and all who have worked togetherto produce this edition of the Gemalto Netsize Guide.

Mike Bell (Jaguar), Mark Curtis (Fjord), Jamie Conyngham (Tapit),Steve Leonard (Singapore Infocomm), Matt Owen (M2MIntelligence), Tarra Del Chiaro (GUESS), Martin Enriquez (Visa),James Lyne (Sophos), Sonny Vu (Misfit), Ben Wood (CCS), TaanyaManlik and Sarah Radwanick (Comscore), Ulrike Röhr (GfK),Robert van der Meulen (Gartner), Manfred Kube, Michael Tworek,Laetitia Jay, Jean-Claude Deturche, Jean-François Ouillet, ThomasSeitz, Remi de Fouchier, Benoit Jouffrey, Michel Guiragossian andChantal Abadie (Gemalto), Ludovic Maupain, Niclas Granholm andArnaud Dubreuil (Netsize).

@ 2015 Gemalto N.V. All rights reserved.

The Gemalto Netsize Guide

Gemalto logos and productand/or service names aretrademarks of Gemalto N.V. orits affiliates. The reproduction,duplication, distribution,publication, modification,copying or translation of any ofthe material contained in thisguide, without the express andwritten authorization of Gemaltoand Netsize, is strictlyprohibited. Counterfeiting shallbe pursued. NetsizeTM isprotected by French, EEC andinternational intellectualproperty laws. All othertrademarks and copyrightmaterial quoted in this guide arethe sole property of theirrespective owners. Where atrademark or a copyrightmaterial is quoted in this guideby third parties contributing to it,Gemalto and Netsize do notthereby represent that suchthird parties have an ownershipinterest in, or a license to use,any such trademarks orcopyright material. No copyrightmaterial in this guide may becopied or further disseminatedwithout the express and writtenpermission of the legal holder ofthat copyright. While Gemaltoand Netsize have attempted tomake the information in thisguide as accurate as possible,the information in this guide isprovided 'as is' without anyexpress or implied warranty ofany kind. Gemalto and Netsizeexclude all liability to any personarising directly or indirectly fromusing this guide and anyinformation from it.

@ 2015 Gemalto N.V. All rights reserved.

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The Gemalto Netsize Guide /// Notes

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Notes /// The Gemalto Netsize Guide

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About the Gemalto Netsize GuideA world of connected devices lies justaround the corner. After the desktopand mobile eras, we’re now entering aphase in which sensors will beembedded into wearables, appliancesand industrial objects. These deviceswill change in response to context. In asense, what was previously dumb willbecome alive.

In this 2015 edition of the GemaltoNetsize Guide, we explore the on-goingevolution of mobility and the profoundimpact of the Internet of Things.

Netsize powers micropayment andmessaging services for operators. Wehelp our customers to monetise mobileservices, improve brand awareness,acquire new customers, managecustomer relationships and optimisebusiness efficiency. The Netsizepayment network connects more than1000 companies to over 160 mobilenetwork operators and reaches morethan two billion consumers.

Gemalto helps people trust oneanother in an increasingly connecteddigital world. Billions of people wantbetter lifestyles, smarter livingenvironments, and the freedom tocommunicate, shop, travel, bank,entertain and work – anytime,everywhere – in ways that areenjoyable and safe. In this fast movingmobile and digital environment, weenable companies and administrationsto offer a wide range of trusted andconvenient services by securingfinancial transactions, mobile services,public and private clouds, eHealthcaresystems, access to eGovernmentservices, the Internet and internet-of-things and transport ticketing systems.

Published by: Gemalto N.V.6 rue de la Verrerie, 92197

Meudon Cedex, France

01,126 Netsize 2015 - COVER_final v2 02/06/2015 15:42 Page 1

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