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Internet of Things May 2023 Viewpoints

What's Next for the eSIM?

By Matthew Beecham

Overview

eSIMs are embedded SIM cards that do away for the need for physical SIM cards and card slots. Prior to Apple's move to eSIMs for the iPhone 14 and 14 Pro, as well as its latest Watch, use of eSIMs was patchy. However, the Trusted Connectivity Alliance, which has tracked the development of the eSIM market since its nascent phase, now suggests that eSIM technology has entered a new era.

Description

eSIMs offer new ways of managing connectivity without the consumer inconvenience of SIM cards—notably, carrier lock‑ins that restrict the use of SIMs to a specific network or country. Other benefits of eSIMs in comparison with traditional SIM cards are that they are reprogrammable, take up less space, eliminate the need for SIM slots, and offer a higher level of security.

The Trusted Connectivity Alliance (TCA) predicts that the accelerating rollout of 5G networks will amplify the benefits of eSIM technology. Other commentators say that Apple's use of eSIMs will drive adoption among other manufacturers. The rippling effect of these developments will extend beyond the smartphone market and into the IoT ecosystem.

Implications

As eSIM technology evolves, it will benefit many sectors, from automotive to smart agriculture. For example, regulation such as the European eCall initiative—which mandates equipping all new cars with emergency calling capability—has already led to an increase in eSIM uptake by carmakers. Although automotive and metering applications were among the first sectors to benefit from eSIM technology, others will follow. eSIM is set to become mainstream for all devices.

Moving up a level, an integrated SIM (iSIM) could further disrupt cellular IoT. Whereas an eSIM's functionality relies on a separate processor and requires a share of the device's hardware, an iSIM is tiny and relies on a system‑on-a‑chip architecture. iSIM technology liberates space for accommodating larger batteries, more RAM capacity, and thinner smartphones. That makes iSIM suitable for smaller IoT hardware such as medical devices and wearables. Both eSIMs and iSIMs enable businesses to connect their technology to a mobile network remotely, reducing the cost of logistics and allowing for smaller devices with lower power requirements.

As with any potentially disruptive technology, the arrival of eSIMs and iSIMs creates a need for debate to better understand its benefits and dispel misconceptions. Despite the benefits of eSIM, conflicts between competing technical standards, namely consumer and machine-to-machine (M2M) standards, are slowing its rollout. One of the key issues facing players in the IoT space is how to accommodate the complexity and cost of M2M eSIM solutions. However, new standards around interoperability, security, and functionality should address this. Until then, the ability to realize a tangible return on investment in the absence of standardization could limit the spread of IoT solutions. Other issues include tighter restrictions on data management regulations globally.

Relevant Areas to Monitor

  • Industry 4.0

    Industry 4.0 leverages machines, parts, and services that exchange data and self-configure to support dynamic, agile, and efficient manufacturing processes. Stakeholders expect Industry 4.0 to revolutionize manufacturing and industrial practices to create self-sufficient systems, but challenges could limit progress.

  • Cellular M2M

    Machine-to-machine communications will be increasingly important for managing enormous collections of devices and enabling device-to-device communications. Developers of 5G technologies aim to improve performance so that handsets, vehicles, sensor arrays, and other devices can reliably communicate with one another.

Impact Scale

On a scale of low, medium, or high, the anticipated level of impact for this topic is: Medium.

Impact Timing

On a scale of now, 5, 10, or 15 years, the anticipated impact timing for this topic is: Now to 5 years.

Opportunities in the Following Industry Areas

  • Sensors/Electronics
  • Internet of Things
  • Information/Telecommunications
  • AI/Automation/Software