What is an eSIM?
Ever since the inception of GSM phones back in 1992, their cellular connectivity capabilities has relied solely on SIM cards. But with the launch of the innovative eSIM (embedded Subscriber Identification Module) technology, also known as eUICC (Embedded Universal Integrated Circuit Card), increasingly more smartphone manufacturers, IoT and M2M device/gateway manufacturers, developers and service providers are considering investing into eSIM cards. In contrast to legacy SIM cards, like the mini-, micro- or nano-SIM, embedded SIM cards are already built into the device during manufacturing.
Tech giants, such as Samsung, Apple, and Google, were some of the first manufacturers to integrate eSIM technology into their flagship products (smartphones and smartwatches). However, the cellular IoT landscape may benefit from embedded SIM cards even more than the consumer electronics markets. It provides value to manufacturers of devices, as well as their users. Nevertheless, network carriers may have strong commercial incentives to prevent the widespread adoption of the eSIM. They greatly profit from customers who don't take the time to update their (nowadays) overpriced subscription plan or make an effort to order a SIM card from a competitor with a better data plan.
How will cellular IoT benefit from eSIM?
When penetrating new markets, the right timing is a crucial factor that can make or break market share later on. Deploying a new IoT network with thousands of IoT devices in a foreign country would be a logistical nightmare with legacy SIMs, having to sign numerous contracts and swapping out thousands of SIM cards.
These factors can heavily delay your time-to-market, which may allow local competitors to potentially get inspired by your innovation and build presence before all your devices are deployed. In this scenario, IoT embedded SIM technology is crucial, as it allows you to connect to your devices remotely and switch to a carrier of your choosing. The transition can be programmed remotely, which saves potential roaming costs.
If you ever had to switch carriers for your cellular network, it probably took days or even a week for your new SIM card to arrive and being able to start using it. While this step is already much of a hassle for the average smartphone user, it would be economically devastating for large-scale IoT networks, with 1000, 10000, or 50000 IoT-enabled devices. In addition, while waiting for the new SIM cards to arrive, these IoT devices may need to utilize roaming data in order to keep sharing their valuable datasets with the network.
eSIM users can simply switch to another carrier remotely in real-time, without having to wait for the new SIM card to arrive. Many IoT device management platforms are set to include features, which lets IoT network operators switch carriers or update to a new subscription plan for thousands of devices simultaneously with virtually one click. Additionally, multiple profiles can be stored on a single eSIM, which means you can switch between network carriers, based on factors, such as coverage, roaming costs, latency, bandwidth, or data transmission speed.
As consumer devices and B2B IoT devices become increasingly smaller, manufacturers are under pressure to shrink their products, making them increasingly lightweight, all while improving processing speed, random access memory, and battery life.
Devices with integrated eSIM technology don't need a SIM card tray, which is essentially dead weight. In addition, the eSIM is around half the size (6x5x0.67mm) of a nano-SIM card (12.3x8.8x0.67mm). This cuts manufacturing costs, and users end up with a superior product. For certain IoT devices, such as wearables, like smartwatches or medical devices (e.g., IoT-enabled insulin pumps or heart pacemakers), this is a major advantage, as weight and size play a particularly large role, defining the appearance and feasibility of the final product.
Furthermore, hardware that up until now simply didn't fit within certain confined spaces may now be implemented, which creates new use cases for IoT devices, further setting your products apart from your competitors, who still may rely on legacy SIM technology.
More often than not, IoT devices will transmit sensitive information that companies use to make informed corporate decisions. This data may be incredibly valuable to competitors, which may become an incentive to try and gain unauthorized access to competitors' IoT data. In the past, legacy SIM cards laid the groundwork for network authentication for cellular devices. However, there is nothing stopping individuals from removing a SIM card from an IoT device and plugging it into their own device, thus gaining access to potentially the entire IoT network and datasets gathered by all other devices connected to the network.
In addition, they may be able to access large volumes of data and consequently increase your roaming costs. If you don't have remote access features, you may not even notice it until the bill arrives.
With eSIM-enabled IoT devices, it is virtually impossible to retrieve the eSIM out of the device, as it is entirely embedded into the devices' circuit board during the manufacturing process. In addition, if the IoT device gets tampered with or stolen, the perpetrator can't remove the SIM card, which means you should be able to track the IoT device through the eSIM easily.
Durability and Waterproofing
As mentioned previously, cellular devices using traditional legacy SIM technology need a SIM tray, so the SIM card can be inserted and connected to the device. This means there needs to be a hole in the device. However, these holes also may allow water, dust, or other debris to enter the device and cause corrosion or other irreparable damage to the circuit board.
Many IoT devices are located in remote locations with rough climatic conditions; they may be installed in humid caves, deep in the ocean, dug into the ground, or attached at the bottom of cruise ships. Thus, any design feature that may compromise the device's longevity needs to be eliminated.
eSIM technology allows manufacturers to build IoT devices, that are entirely waterproof. This opens the door for entirely new use cases, as IoT devices may be used to predict floods, tides, swells etc. Even on land, it allows for a product with much better durability.
eSIMs may be against a carrier's economic interests
The original idea that inspired the conception of the eSIM was, to create a SIM card that is not subject to contractual lock-in by carriers. However, this might be a less than desirable feature from the carriers' perspective. Although less likely to take place in the IoT space, large chunks of their overall profits are taken from customers still paying for outdated, overpriced subscription plans or customers simply wanting to keep their phone number or being too lazy to switch to a better carrier with faster data-rate. The deployment and establishment of the IoT ecosystem is a complex task. Organizations, will rely more and more on corporate data gathered from a large number of devices. Even though switching carriers with an eSIM may appear easier in theory, this may not reflect reality, as customers may still have to go through contractual procedures.