In 2021 there were over 8 billion mobile device subscriptions worldwide, which is more than the total number of people in the world. These subscriptions are identified by Subscriber Identity Modules, or SIM cards. SIM cards are smart modules that are integrated into mobile devices and authenticate them to operate on a cellular network. Historically, SIM cards have been associated with devices such as smartphones, tablets, handheld computers, and radios; the emergence of smart devices has now seen SIM cards put in smart watches, wearable devices and even automotive vehicles. Traditional SIM cards are physical cards that slot into a tray on a mobile device; however, both device manufacturers and operators are moving away from physical SIM cards to eSIMs, and more recently, iSIMs, which are also embedded but are smaller and cheaper to make than eSIMs. These SIM cards are embedded into the motherboard of a device during the manufacturing process, and then updated/configured via software tools. Today, over 80% of operators offer eSIM services and this number will reach close to 100% by 2025.
SIMs have evolved for a variety of reasons; primarily size. eSIMs are three times smaller than physical Nano-SIMs, which allows OEMs to add hardware features, such as larger cameras, integrated scanners, bigger batteries and more. iSIMs, developed by ARM, are even smaller (and cheaper to make) than eSIMs and are targeted towards IoT devices and use cases. Today, the most prevalent use cases for eSIMs are in connected vehicles, in utility meters for remote monitoring, and within IoT devices for asset tracking purposes. Physical SIMs haven’t found success in automobiles due to damage from temperature changes, weather exposure, and vehicle vibrations. eSIMs, however, are embedded into the vehicle, making them more secure. These modules enable vehicles to become ‘connected’ and ‘smart’ by providing advanced capabilities such as secure communications, vehicle telematics/diagnostics, internet connectivity, as well as automation in the near future; in Europe, eSIMs have enabled the eCall feature, an EU-mandated feature in which every new car in Europe contains an asset tracking device used for emergency calls.
In the utilities sector, eSIMs are used to provide security and remote configuration of smart meters. As municipalities look to modernize electrical grid infrastructure, smart meters are primary targets for cyber threats. Embedded into the meters, eSIMs provide cellular connectivity between devices and operator gateways that do not go over the public internet; in addition, the unique profiles associated with each eSIM allows utilities to set up protocols that only authorize access to verified devices. As smart meter technology continues to advance, utilities can remotely monitor, send software updates/configurations and even manage devices as power supply/demand scales, all enabled through eSIMs.
The third largest use case for eSIMs today is asset tracking. Aside from asset tracking in vehicles, discussed earlier, eSIMs have enabled asset tracking for IoT devices by allowing for automatic switch-offs between network carriers as devices move across countries and coverage areas. With the rise of private wireless networks across every sector and region, eSIMs can play a vital part by providing remote management and provisioning capabilities, as well as enabling devices to switch from an enterprise’s private network to the outside public network seamlessly as they move in and out of facilities; especially prevalent among transportation and logistics environments.
The development of eSIMs has provided numerous benefits to a world digitalizing at exponential rates. Mainly, eSIM development is streamlining the SIM supply-chain through integration in the device manufacturing process; this technique is critical for the progress of the IoT device market, as managing physical SIMs within IoT devices causes complexity and added costs. As technology increases at higher rates, eSIMs have provided future-proofing in which devices can be updated, configured and managed remotely, and without having to replace the SIM. Recycling is another increasingly-valuable use case for eSIMs, as profiles and data can be wiped from an eSIM, allowing the device to be reused for another purpose or user. Of course, with new technology come new challenges, and eSIMs are no exception. The primary concerns are integration with existing technology (especially in the enterprise, where legacy systems may be heavily involved in operations), an unclear return on investment of eSIMs and the cost of implementing them relative to traditional SIMs, and security concerns; even though eSIMs provide advanced security functions, like zero-touch provisioning, new technologies present new threats.
Although eSIMs have emerged somewhat recently and are becoming the standard for carriers, manufacturers and consumers, the next evolution of SIM cards is already emerging: the iSIM. First introduced in 2021, iSIMs are even smaller than eSIMs, cost less to manufacture and use less power, resulting in longer device battery life. Targeted toward IoT devices, the iSIM has lots of potential for adoption in the future as the IoT market grows. However, eSIMs are only now becoming the norm for revolutionizing the device manufacturing supply-chain, and the expected growth in device adoption over the next 5 years suggests this revolution will be necessary and innovative.