eSIM (eUICC) is the future of SIMs!?

Tags: eSIM
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Written by
Märt Kroodo

One of the barriers, that stops IoT device makers from adapting cellular connectivity, is the physical SIM card, which locks the devices to a single mobile carrier. 1oT has solved this problem with its carrier-switchable SIM solution (read more about it here). However, things get even easier with eSIMs (eUICC). With that technology, we will see devices that have never been connected to internet, become "smart" within the next three years.

eUICC solution (eSIM) can be regarded as one possible future SIM technology and it has already been deployed in a few smart devices (e.g. Samsung Gear 2 watch). The solution is in compliance with GSM Association (GSMA) specifications​ and therefore, approved by all world’s largest operators. It is now up to device makers to find new business opportunities from the solution to take the next step.

Like MFF2 UICC (chip SIM), eSIM can be soldered onto the circuit board, making it a perfect option for devices that are located outdoors (MFF2 chip CIMs can be sealed from moisture and corrosion) or are in constant motion (shocks). However, eUICC can come in a form of a standard SIM card as well.

Why special?

What makes eSIM different from its predecessors is the new standard it follows. It makes mobile carrier switching easy, wherever the device ends up being at. eSIM carrier profiles can be managed remotely over the air (OTA), meaning that the SIM never needs to be removed or replaced. Therefore, the solution can be deployed once and modified remotely for up to 20 years without any compromise on security.

Which sectors are benefiting from eUICC?

eUICC is benefiting both large devices with long life cycles (e.g. cars) and smaller, often portable devices with relatively short life cycles. Consumer electronics sector (e.g. bikes, wearables, cameras) is benefitting from eUICC without a doubt and is expected to lead the market in terms of number of connections. However, automotive sector is forecasted to generate the most connectivity (data) revenue from the solution - EUR 5bn vs EUR 1bn from consumer electronics in 2020 (according to GSMA). In addition to all other values that the connectivity is bringing to automotive sector, eUICC is strongly supporting the second hand market of vehicles due to its ability to switch carriers. Thirdly: utility, transport and security sectors are moving towards adopting eUICCs as a standard, once the solution has provided efficiency in manufacturing, setup and handling processes.

Breakdown of sectors by connections deploying eUICC in 2020 (by GSMA)

It is important to point out that, according to GSMA, connectivity (data) revenues represent typically only 5–10% of the overall revenue opportunity that connectivity solutions are bringing to device makers. It will be interesting to see which market players and how will they actually gain from offering connectivity services to end users in the future.

eSIM compared to other SIMs?

Please read about other types of SIM from here.

1oT will soon launch eSIM compatibility with our API. Stay tuned!

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