The widespread adoption of embedded SIMs (eSIMs) is set to revolutionise the cellular IoT landscape, fuelling growth and market disruption. As virtual counterparts of traditional SIM cards, eSIMs offer benefits like operational efficiency, cost reduction, and enhanced security. Their increasing acceptance is expected to significantly influence different aspects of the cellular IoT ecosystem, reshaping market dynamics and contributing to the continuous growth of cellular-based solutions in the enterprise IoT services sector, according to insights from GlobalData, a prominent data and analytics company.
eSIMs operate through subscriber identification being transferred to an embedded universal integrated circuit card (eUICC). This software-centric approach is expected to utilise a new industry standard, enabling programming and remote deployment flexibility. This adaptability allows device manufacturers, cellular operators, users, or third-party eSIM managers to effortlessly program devices for network operator switches without needing physical SIM card replacements.
John Marcus, Senior Principal Analyst, Enterprise Technology and Services at GlobalData, notes: “eSIMs have been present for a few years. Initially, there was more enthusiasm from users and device makers than mobile network operators, who saw them as a potential threat. This perception is shifting, especially after the introduction of a new industry specification for IoT eSIM earlier this year.”
GlobalData’s analysis highlights numerous benefits of eSIM adoption in IoT, including cost reductions for operators and decreased hardware and operational costs for device manufacturers and users. It also simplifies installation and deployment processes, offers increased flexibility, and enhances security measures.
Marcus adds: “eSIMs are wholly beneficial for manufacturers of IoT devices and connected products. However, they are likely to affect every aspect of the cellular IoT ecosystem in some way.”
GlobalData’s latest forecast suggests that cellular-based solutions will continue to lead in the enterprise IoT services market, with a projected Compound Annual Growth Rate (CAGR) of 17.3% through 2027. This growth is attributed to eSIM adoption, alongside the transition from 2G-3G switch-offs, the adoption of 5G, and the rise of private cellular connectivity.
The report emphasises the GSMA’s new eSIM specification, SGP.32, specifically designed for IoT. This specification replaces the outdated M2M eSIM standard and introduces simplified remote provisioning via an IoT Manager module and an embedded IoT Provisioning Assistant. SGP.32’s automated profile switching capabilities offer numerous benefits for OEMs (Original Equipment Manufacturers) and users, including increased flexibility, reduced costs, extended lifespan, and global product development opportunities.
Marcus concludes: “While the automated profile switching enabled by the standard has positive implications, it also presents challenges such as heightened competition for IoT service providers and a shift in control dynamics among operators, SIMs, and devices.”
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