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SIMCom CEO Yang Tao: 5G will accelerate the Industrial IoT and Vehicle networking
The release of the 5G licenses on June 6 this year heralds upcoming changes in the world of wireless connection. From GSM, WCDMA, to FDD-LTE, almost all the new trends of the mobile Internet come with technological innovations. Leading figures of the time such as Motorola, Nokia, Ericsson etc. emerge whilst setting higher and higher level of standards. One after another, they dominate the area of mobile communications and even the global economy with key technologies and economic lifelines at the palm of their hands.
With technological development advancing, China finally find itself racing along with the European and American front-runners of mobile communications in the 5G era. However, as early as 15 years ago, SIMCom already independently designed and developed world’s first GSM/GPRS modules and achieved No.1 shipment in Asia the year after.
In the past five years, SIMCom has taken the lead in launching the SIM7230E/SIM7250E with miniPCIE interface and that supports multi-band FDD-LTE modules. In the second year, the company successfully ranked the top in global cellular module shipments
In early 2019, SIMCom and Longsung established a module business cluster to consolidate back-end product R&D and project R&D resources. To give full play of the collective effect, complement in product R&D, and make efficient use of resources, Yang Tao, President of SIMCom, also works as the CEO of both companies. 5G connection modules, as the driving force of 5G, is no doubt the crux of the development process.
The reporter of Zhongshi Media asked Yang Tao: “as the CEO of the two companies, are you very busy and stressed, considering you need you attend to both?” Yang laughed: “I’m constantly experiencing up-in-the-cloud kind of life. One minute, I’m in Shanghai, and another I’ll be flying to another city. Over the years, I could barely take well care of my family. My guilt is beyond words.”
Recently, Yang Tao, President of SIMCom, have won the "5G + Technology Pioneer Award" awarded by 5G China Innovation Hundreds Group. As one of the leaders of the module sector in China, Yang Tao has many thoughts on the opportunities and challenges in the 5G era.
While 5G is around the corner, how do module companies view the benefits brought by the era? As the module manufacturer directly facing the 5G terminals, Yang Tao has a more accurate assessment of the market climate. He holds that 5G should be experiencing the boom in the second half of next year at earliest, and there are still buffer time.
Q: Could you please tell us some recent changes and market strategy adjustment of SIMCom, especially of the brand?
Yang Tao: it has been 15 years since SIM100, the first GSM/GPRS module developed and designed by SIMCom, entered the field of mobile communications. In the following year, because of the great support of SIMCom’s customers, our shipment ranked first in Asia.
It’s been 12 years since SIMCom joined the 3G trend to launch the first WCDMA module SIM5210 and the first TD-SCDMA module SIM4100. In the following year, with our partners’ support, our shipment reached 10 million.
It’s been 5 years since SIMCom pioneered in launching the miniPCIE interface and the module SIM7230E/SIM7250E that supports multi-band FDD-LTE; In the following year, our shipments of cellular module reached No.1 in the world.
17 years has passed since SIMCom was founded in 2002. We have always upheld the good tradition of focusing on product, R&D, and services. We are deemed as a top training institute of module companies, providing trainings a large amount of people every year. Nowadays, founders and executives of many module companies, such as Quectel, Mobiletek, MeiG, Fibocom, etc. all have previously worked at SIMCom.
Since 2019, SIMCom and Longsung Technology have set up a module business cluster to consolidate resources for back-end product R&D and project R&D to utilize the collective effect and make efficient use of complimentary expertise in product R&D and resources. I myself work as the CEO of both SIMCom and Longsung Technologies. The annual R&D investment of SIMCom exceeds 10% of its total revenue, and hundreds of millions of yuan are invested in R&D every year. Since we started 5G R&D, the group has invested nearly 1 billion RMB in R&D, testing, getting authentication and other related projects. We have different market strategies derived from the Enterprise Cloud + Terminal solutions. SIMCom overlays perception, edge data analysis and processing with the single-functional module to create four-scenario products of traffic module, general flow, connection enabling kit, and one-module-two-cards from module, cloud module to AI module in a hope to provide customers with great user experience with one terminal access and seamless switching.
Q: You have also won the nomination of "5G China Innovation Hundreds Group" and the award of "5G + Technology Pioneer". What do you think of the status quo of 5G? For terminal companies, what are the existing challenges you foresee?
Yang Tao: the era of 5G indicates both opportunities and challenges for SIMCom. It demands more on companies’ capital and talent reserve requirements. Strong focus on R&D and huge investment is the key to SIMCom’s leading industrial position, while the innovative R&D of module products is one of the essentials for companies in the 5G era. Modules need to integrate perception, front-end data processing, analysis, data access and transmission into a comprehensive module. Therefore, module manufacturing itself will face great challenges. While providing module business, highly competitive module companies should not only gradually improve the added value of modules, but also equip themselves with capabilities such as data analysis, which is a new test for the module industry.
In the future, SIMCom will continue to increase R&D investment, especially in our Chongqing R&D center, because Chongqing SIMCom is the 5G R&D center of the group. In next steps, SIMCom will strengthen the interactions and cooperation among the three major R&D centers in Shanghai, Shenyang and Chongqing to form a golden triangle to support our global product R&D and technological iteration. 5G also heralds a golden era for enterprises with clear strategic goals and dual competitive advantages in products and services.
Q: What do you think of low power connections such as NB, eMTC, LoRA, etc.? After the withdrawal of 2G, how do IoT companies deploy connection terminals?
Yang Tao: LPWA (Low-Power Wide-Area Network) includes wireless communication systems such as NB-IOT, e-MTC, Lora, etc. The former two (NB-IoT and e-MTC) is 3GPP and the latter (Lora) is the representative of LPWA in unauthorized frequency bands.
The two communication systems of 3GPP authorized bands and non-authorized bands have their own pros and cons. The former has the advantages of high security and wide communication coverage, while the disadvantage is that the cost of network construction is high, SIM cards are needed, and certain fees are incurred for terminal products.
Take a global perspective: there are 78 commercial networks in NB-IOT and 36 in e-MTC, mainly locating in Asia, Europe, America and Australia, among which e-MTC is mainly found in North America, Western Europe and Japan.
Meanwhile, in domestic NB networks, operators are still focusing on single NB networks. Last month in November, the Ministry of Industry and Information Technology issued eMTC network frequency regulations, which are specified in public network frequency bands and private network frequency bands. It is provided that eMTC public network frequency bands shall be categorized as LTE bands and implemented by National Radio Administration Bureau, while private network eMTC bands shall be implemented by local radio administration agencies. At present, the use of eMTC public network frequency band still depends on the policies of major operators (operators do not need to upgrade hardware but need to upgrade software and maintenance, hence the lack of motivation). On the other hand, the private network eMTC has been adopted in areas such as urban IoT and is gradually becoming a mature technology.
Generally speaking, the commercial networks of 3GPP licensed frequency bands such as NB and e-MTC become matured. According to the forecast of authoritative organizations, the number of domestic connections of NBIOT will exceed 100 million by the end of this year, and the number of global NB-IOT/e-MTC connections will exceed 1.8 billion by 2025.
Q: SIMCom has always enjoyed a huge share of the overseas market. Now how do you position yourself in the overseas and domestic markets?
Yang Tao: SIMCom has been founded for 17 years and has been conducting international business for more than 10 years. We are also the first domestic module enterprise to go abroad. During these years, with innovative technology and service capabilities, SIMCom has been satisfying customers’ IoT needs in various industries while paying increasing attention to product quality and supply. Strategically, next year will be the year of oversea for us, which means that we will increase our investment and management overseas.
It has been well seen that module companies have undergone drastic changes over the recent years. There are six major listed companies born in China, indicating that module companies are no longer playing the sole role of manufacturers - they have become an essential force for the development of the IoT.
While domestic market has been witnessing white-hot competitions, the global market has also become one of the major battlefields for various module companies. They have been working hard in increasing overseas sales personnel, sales outlets, and technical support. To address the needs of high-quality products, they are setting up dedicated overseas module project team and product R&D teams so as to shorten the time of product research and development, and eventually improve product quality. In view of the stringent certification of overseas operators, the companies are establishing specific overseas authentication team to facilitate the overseas authentication process and the overseas market readiness.
Q: Shared bicycles used to be a golden opportunity for module companies. What do you think are the most promising Internet applications in the future? How to embrace the market opportunity around the corner? How to brace yourself for it?
Yang Tao: in the future, with the development of 5G and even 6G, industrial IoT and automobile IoT that focus more on application scenarios should be the hot spot areas. First of all, when it comes to the industrial IoT, the large capacity, high bandwidth and low latency of 5G meet the demands in industrial scenario. Tests show that 5G UWB can provide speed 20 times faster than existing wireless technologies. With this responsiveness, potentially, IoT can not only simplify but also increase the types of potential industrial enterprise customers.
In addition, the industrial IoT is usually distributed in a harsh environment, resulting in a large number of data that need to be analyzed and processed immediately, and it needs the stability of data transmission and storage at all times, otherwise it will cause failure or downtime of the production line at any time. Therefore, the processing function of industrial IoT requirements must be adjusted to the edge of Internet. And the demand of module products is no longer simple data transmission, it has to integrate the complex functions of perception, front-end data processing, analysis, data access and transmission into one module. Simple module manufacturing will face great challenges, strong competitive module companies should not only provide module business, but also gradually improve the added value of modules, but also gradually have the ability of data analysis, which is a new challenge for the module industry. Simple module manufacturing will face great challenges, strong competitive module companies should not only provide module business, but also gradually improve the added value of modules, gradually equip themselves with capabilities such as data analysis, which is a new challenge for the module industry. However, 5G is also a golden age for enterprises like SIMCom which have clear strategic goals and dual competitive advantages in products and services.
As for automobile IoT, a unified definition of self-driving automobile grades in the industry was proposed as early as 2014. The commercial use of 5G will accelerate the development of automobile IoT and the upgrading of intelligent network-connected vehicles. Compared with 4G technology, 5G technology has tens of times the bandwidth and speed and low latency of 1ms. All these features have laid a technical foundation for the rapid progress of shifting from the era of automobile IoT to the era of self-driving. SIMCom will, as always, strengthen cooperation with vehicle manufacturers, Tier1 manufacturers and partners of the new self-driving area, such as MMW radar and AI algorithm vendors, to actively integrate ourselves into the self-driving ecology to provide more reliable and intelligent communication modules for self-driving as well as promote the continuous upgrading and evolution of our own module products with the help of external partners.
In fact, SIMCom has been involved in automobile IoT applications, and has many popular module products widely used which include the earliest 2G DVR, tracking products, 3G/4G T-box, 4G car phones/vehicle-mounted multimedia terminals. The SIM7920X-AU and SIM8200X-AU modules of 4G | 5G C-V2X are planned to be launched next year. The main target markets are level 3 and higher-level of self-driving applications.
Q: How do you think of the current price trend of 5G chips, 5G modules and 5G terminals? When do you predict the wide application arrive?
Yang Tao: 2019 is known as the opening year of the 5G era. China's three major operators, together with NRTA, have all obtained 5G commercial licenses. Therefore, operators have been strengthening the construction of 5G networks in this year. The major chip manufacturers also rolled out their own 5G chips in 2109. Considering the evolution of the new 3GPP standard and the design cycle of the wireless communication terminal industry chain, the year 2020 will be a breaking point of 5G communication terminals. It is expected that 5G IoT terminals will be mass produced in the second half of 2020.
As the investment of 5G network construction is large and it is relatively complicated in terms of technologies, the compatibility test between terminal and network also needs more time. However, the large bandwidth, low latency, wide coverage of 5G and the feature of network shards, it will catalyze revolutionary applications in the original industry as well as new industries.
Currently, the price of 5G chip in the mainstream market is still high, it is optimistically estimated that the mass application of 5G IoT terminals will appear in the next few years. Only if 5G terminal products be widely used, can the large-scale application drive down the R&D and production costs from network construction to terminal products, which in turn will promote the development of the industry and become a virtuous circle. In this way, the prices of 5G modules and 5G terminals will gradually be stabilized. Take 5G CPE as an example, the current mainstream price is around 3000 RMB, with the hand of market economy adjusting, it may be lowered down to less than 1000 RMB.
Q: What is the plan for the SIMCom in 2020? How will SIMCom deploy its business next year, and which directions will it focus on?
Yang Tao: in the past ten years, SIMCom has achieved a great success thanks to our sound operation and industry-leading R&D capabilities. Over the past decade, China's economy has made great progress, and it has become the second largest economy in the world, which drives several large science and technology industries to spring up, from the PC Internet, mobile Internet, to today's IoT. The development of SIMCom cannot be made without the progress of the whole society and that of science and technology. At the same time, the organizational structure, mode of operation and technological direction of SIMCom are in constant adjustment and changes.
In this process, SIMCom has inevitably faced with the problems of corporate brand, stale mode of operation, lack of vitality etc. For us, 2020 will be the year of brand reshaping. We will increase the exposure and promotion of brands around the world, so that more young enterprises could recognize SIMCom. At the same time, the year 2020 is also the go-overseas year for SIMCom. In 2020, SIMCom will invest more resources in international markets, fully participate in cooperation with global customers, while focusing on global markets such as Europe, America and Asia-Pacific.
In 2020, SIMCom will focus on level up investment and layout in automobile, mobile payment, sharing economy, industrial routing, video monitoring and other areas to serve our customers. In addition, SIMCom will also develop and grow together with our upstream and downstream partners to achieve win-win results.
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