Taking IoT to the next stage

Taking IoT to the next stage

Interviews |
By Julien Happich

Hanns Windele: You have been described as a pioneer of the Internet of Things. What is IoT for you?

Georges Karam: For me if there is no business model to monetize a connected device, then it is just a gadget or it will never happen. At Sequans, we are specialists in 4G. The company has a 12-year history, but when we started we weren’t thinking about IoT at all. We were thinking 4G broadband or 4G on smartphones. I still remember in 2003, when the company was right at the beginning, I was saying that there was something missing on the 3G phone. So we took WiMAX and embraced that. We could see the opportunity to make something happen and became the first company in the world to power the 4G phone. At that time iPhone was just happening with 2G and 3G. We were very successful in 4G. But when WiMAX went down we shifted our focus to LTE.


HW: What happened to you when WiMAX finished?

GK: It was the worst day of my life. You wake up in the morning and you’re doing $35m per quarter, and then you have a customer calling you to say ‘stop shipping.’ We don’t know why, and neither do they. Then you find that Sprint has put all its money on Apple to get the iPhone on its network, although not supporting 4G yet.  In three financial quarters our revenue went down to zero. So you have 300 people, no revenue, no product to sell and nothing you can do to fix it. We knew that LTE needed to happen. So what do we do? Do we give all of the money back to the shareholders and say ‘thank you, goodbye’? The big move that we made at that time was not to copy all the big semi guys.


HW: What did you do differently?

GK: Well, I said that we weren’t going to do anything in smartphone anymore. But many guys were saying to me: ‘you’re crazy. You must work to get 2G and 3G fallback in addition to 4G and address the smartphone market’. But I said that I was going to focus on the future. The last thing you want to do is reinvent the past. The future is about new things and at the time the future was all about 4G. I explained that it was going to be painful because we didn’t have short-term revenue and we would have to wait for 4G network coverage. But we were going to be the best guys delivering 4G. The short-term focus was to deliver wireless broadband. But we discovered later that the main one was, of course, IoT.


HW: What sector of the IoT market were you aiming for specifically?

GK: It’s a low price, low power and low data-rate market. The old world of IoT was M2M, in other words connecting machines, around 100 million units a year.  But we’re now talking about connecting everything and there is no limit to the dream. There are billions of things to connect. Applications range from home security, smart city, energy management, tracker, e-health and wearable. We’re going for markets where there is high volume and low prices.

HW: How do you compete with someone like Qualcomm?

GK:  We’re not really like Qualcomm or Intel because we are pure 4G and they are still in 3G and 2G because they need the fallback for voice on mobile phones. Our technology is optimized for 4G only, and by doing so we deliver the best performance with a much lower cost, attacking not the smartphone market, but the home router and IoT.

Our approach was to optimize the cost and power consumption of our 4G chip by limiting the speed to 10Mb/s (CAT1 LTE), as 150Mb/s (CAT4 LTE) is not needed for IoT. In fact, CAT1 LTE is part of the 3GPP standard, but no one was doing anything with this. We didn’t invent CAT1, but we resurrected it. Everyone was looking the other way: which was speed, speed, speed. But the IoT market doesn’t need speed: it needs low power and low cost. So we became leader in CAT1. Two years ago, only Sequans was talking about this. Now, the whole world is, and it is becoming de facto for the M2M applications moving from 2G to 4G. Then the eco-system realized that we needed to define a better standard fully designed for IoT. We could limit the speed to 1 Mbit/s or even lower and reduce the bandwidth of the LTE signal from 20MHz to 1.4MHz or 200kHz. A new LTE standard has been defined with two variants: CAT M1 (machine) and CAT M2 or NB-IoT (narrow-band). Sequans is now sampling a chipset supporting this new IoT standard.

Georges Karam, President and CEO of Sequans
Communications: “…I want to make Sequans an IoT company”

HW: What did you learn working with big companies like Philips and Alcatel?

GK: When you come to a big company, the first thing you encounter is the legacy. It can be a good thing because you learn a process that is built on years of doing things in a certain way. That’s not taught in university and so you learn how to make things happen. But the worst thing about big companies is the way politics gets mixed with the decision process. In a big company the CEO is effectively on the moon, and there are all these layers of management. In organisations like this communication becomes very complicated. I am doing everything to avoid this in Sequans, which has only 250 people. A big part of my energy is taken up with communication within my organization.


HW: When do you think IoT will take off?

GK: It’s all about the business model behind it. A good example of this is the guy who makes the sensor to transmit data about when a trashcan is full. I asked: ‘how much do you sell these for?’ He said that he didn’t – he gave them away. The local authority was spending, say, €1m sending trucks around the town to empty the bins whether they were full or not. And so the sensor manufacturer says that he’ll connect up the bins so that you only need to send trucks to where they are needed, when they are needed. This reduces the cost to €0.6m, for example. The saving is split in half, with the authority making a 20 per cent saving and the manufacturer picking up the remaining €0.2m. This is the sort of model where the IoT can make money for everyone.

HW: How does Sequans take advantage of a model like that?

GK: To make it work you need sensors, a sensor hub, controllers and connectivity. No matter what, you need to connect all this on the internet and if you can do it with LTE technology with low cost and low power, then this is where we can come in and the game is over. To see IoT happening you need two things fundamentally. The connectivity needs to happen and then you need to build your service offerings around that.


HW: Where do you want to take Sequans as a company?

GK: When you manage a company your objective is to grow it. The day I am unable to grow the company I’m dead. I’m lucky because the IoT market is huge and there is a lot of room to play there and make a company with revenue of a few hundred million dollars. I can add more technology, but I want to keep it in IoT because I want to make Sequans an IoT company. I can see how I can take the company down that road. But if someone comes along with a big cheque and the shareholders believe that to sell is good for them, then why not?


HW: Historically speaking, what technology has had the biggest impact on your market?

GK: I’m a signal-processing guy and so I believe wireless technology and wireless communication is key. My kids think of a smartphone as a screen and that is all. They don’t think about what’s inside it. Indeed, there are two things that are impressive here: obviously the microprocessor, but also the comms technology on the other side, starting from Shannon Theory all the way up to where we are today. Twenty years ago no one could imagine having a 1Gbit/s wireless connection on your phone. People today think that this is nothing, but when I was a PhD candidate we were saying that this would never happen.


HW: What’s the most important part of a CEO’s job?

GK: At the end of the day, job number one of the CEO is to take decisions. You have to accept that it is your call, even if the following day you realise that the decision was a bad one. I don’t care how complicated the decision is. It is the CEO’s job to take it and if he can’t do that, then he needs to give up.



Quick-fire questions

What’s your idea of a perfect holiday?

One where I can work for two hours a day so that I can keep on top of business and then relax for the rest of the day with my family.


Who would you share a prison cell with?

French philosopher Luc Ferry. I love his books.


How many electronic devices do you have?

I’m not an early adopter and so I just have a smartphone and a laptop.


What gadget could you not live without?       

Smartphone. I can stay connected all the time and it’s so convenient.


If you could run a business outside the technology space what would it be?

I would open a restaurant. I don’t want to cook, but I could welcome the people.


If you weren’t a CEO what would your ideal job be?

I’d like to be a politician.


What piece of technology would you donate to a museum?

Maybe an old hard-wired phone.


Apart from business books what do you read?

A lot of philosophy. Paul Davies’ ‘About Time’ and ‘The Mind of God’.


About the interviewer:

Hanns Windele is Vice President, Europe and India at Mentor Graphics.


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