Complex sentence: Prior to HCE, card emulation only existed in physical space, meaning that a card could be replicated with multiple-purpose Secure Element hardware that is typically housed inside the casing of a smart phone.
Split into simpler sentences: Prior to HCE, card emulation only existed in physical space. In other words, a card could be replicated with multiple-purpose Secure Element hardware that is typically housed inside the casing of a smart phone.