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.