eSIM (eUICC) is the future of SIMs!?

One of the barriers to adapting cellular connectivity has been the physical SIM card that has been locking IoT device makers 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 eSIMs we will see devices that have never been connected to internet before becoming 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 (corrosion) or are in constant motion (shocks). However, eUICC can come in a form of standard SIM card as well. 

Why special?

What makes eSIM different from its predecessors is the new standard that it follows. It makes mobile carrier switching easy, wherever the device will end up 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 in the device 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, as the solution is proving 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 will actually gain from the service revenue to end users the most 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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