According to a study, manufacturers and consumers have given embedded subscriber identity modules greater traction than mobile operators, but this is about to change as a result of a new IoT eSIM definition.
The embedded subscriber identity module (eSIM) industry has seen huge growth and uptake by leading firms in the sectorover the past year, and this accelerating adoption is poised to reshape the cellular internet of things (IoT) landscape, driving growth and market disruption, according to a report from analyst Global Data.
With eSIMs, consumers can activate a mobile network operator (MNO) plan without the device requiring a physical SIM card. As a result, more and more original equipment manufacturers (OEMs) are producing eSIM-capable products. Examples of these OEMs are Apple and Samsung. eSIMs have several advantages over regular SIM cards, including lower costs, more operational efficiency, and improved security.
According to GlobalData, eSIM usage is expected to accelerate and have an impact on a number of IoT ecosystem elements, including market dynamics and the sustained expansion of cellular-based solutions within the enterprise IoT services industry.
On embedded universal integrated circuit cards (eUICCs), subscriber identification is downloaded in the case of eSIMs. According to GlobalData, eSIMs will soon be able to benefit from a new industry standard that enables remote deployment and programming, and they will be operating as a software-based solution. With this flexibility, there will be no need for physical SIM card replacements as cellular operators, device manufacturers, users, or third-party eSIM administrators can programme devices for network operator swaps effortlessly.
“Even though eSIMs have only been around for a short while, it is reasonable to argue that users and device manufacturers were far more excited about them earlier than mobile network operators, who saw them as a threat,” stated John Marcus, senior principal analyst for enterprise technology and services at GlobalData. “With the release of a new industry standard for IoT eSIM earlier this year, that is beginning to change.”
GlobalData believes there are several benefits of eSIM adoption in IoT, including cost reduction for operators, users, and device manufacturers, diminished hardware and operational expenses, simplified installation and deployment processes, heightened flexibility, and improved security measures.
The analyst firm forecasts cellular-based solutions will continue to account for the largest slice of the enterprise IoT services market through 2027, growing slightly faster than the overall market at 17.3% compound annual growth. eSIM adoption will drive part of that growth, along with upgrades from 2G-3G switch-offs, 5G adoption, and private cellular connectivity.
The new eSIM specification from the GSMA, SGP.32, created especially for IoT, was also highlighted in the paper. With an IoT Manager module and an inbuilt IoT Provisioning Assistant, this specification offers simpler remote provisioning, replacing the outdated M2M eSIM standard. According to Global Data, SGP.32’s automated profile switching features offer a number of benefits to both OEMs and users, including greater flexibility, a longer lifespan, cheaper costs, and advantages for device makers that promote international product development.
“Even though eSIM offers significant benefits to producers of connected goods and IoT devices, the trend is probably going to affect every aspect of the cellular IoT ecosystem,” Marcus continued. “Automated profile switching made possible by the standard has both positive and negative effects. Firstly, it may lead to more competition among IoT service providers and a change in the control dynamics between the SIM, the device, and the operator.”
The value of the worldwide eSIM market is anticipated to rise from $4.7 billion in 2023 to $16.3 billion by 2027, per a Juniper Research analysis. According to Juniper, the eSIM market would have expanded by 249% on an annual basis by the end of 2023.
According to a July 2022 survey by the global mobile trade association (GSMA), 260 mobile operators in 88 countries were providing commercial eSIM services for smartphones. The study also predicted that 76% of all smartphone connections will be made up of eSIMs.
