What is an eSIM and why do we need a new kind of SIM?
The embedded SIM or eSIM has been around since 2013, but before we can unpack what an eSIM is, we first need to understand its predecessor – the SIM card.
The SIM card was once viewed as the brain of the cellphone, an essential data storage microchip that could securely store the user’s identity when the device was connected to a network.
However, with a new generation of connected devices, development of machine to machine (M2M) communications and interconnectivity of devices, the limitations of the SIM card have become increasingly apparent.
It needed to be accessible, but it was not sturdy enough to withstand extreme temperatures or shocks and was too large for some intended uses.
Additionally, the world is in the midst of a digital transformation and there has been an increased investment in adopting digital technologies that can simplify the customer experience.
There is a growing demand for faster, safer, and more seamless customer experiences, which the adoption of eSIM technology can increase.
eSIM – the SIM card of the future and why it matters
In October 2013, GSMA revealed it was developing a new kind of SIM that could be soldered in place and then programmed to connect to a chosen carrier remotely.
In our hyper-connected and on-demand economy, a natural evolution to SIM cards, the eSIM can help to address the following:
Miniaturization – While traditional devices such as cellphones and tablets could use SIM cards to connect to mobile networks, with the rapid development of new technology and devices such as wearables, the shape and nature of devices varies significantly, which has made the traditional SIM card a less than ideal option.
Stand-alone connectivity – The eSIM allows for stand-alone connectivity which does not require customers to tether their devices such as fitness bands or cars to their smartphones to connect to a network.
Scalable security – With the IoT, a more scalable security mechanism is required to address the needs of multiple stakeholders and geographically dispersed network of devices.
In a nutshell, an eSIM is a more convenient, efficient, and secure SIM card which allows users to benefit from a fully digitised journey.
The advent of an increasing number of new eSIM-capable IoT devices since 2016 (including Apple’s new iPhones and iPads and Android eSIM-ready smartphones since the end of 2018) have raised the challenge to deliver a straightforward customer experience regarding the mobile eSIM-enabled connectivity.
More than 2.8 billion eSIM-compliant smartphones are expected to be cumulatively shipped between 2018 and 2025, according to Counterpoint Research, they expect the trend towards eSIM-only smartphones to catalyse the market further, due to greater adoption.
Key stakeholders such as mobile networks have endorsed the advantages of eSIM and eSIM technology is increasingly found in a wide range of consumer products such as smartphones, wearables, and computers.
Major companies who have embedded this technology include:
While other players such as Google, with its Google Pixel 4 and Apple’s recent iPhone models have introduced the option of eSIM through dual SIM options, the Motorola Razr has fully embraced eSIM technology.
The new Motorola Razr will rely on a Thales embedded SIM for secure mobile connectivity and is the first smartphone to launch without a physical SIM card slot, relying exclusively on this highly compact solution for secure mobile connectivity.
Most recently, Samsung announced that its Galaxy S20 model would feature a secure single-chip solution to support both mobile connectivity and trusted contactless services.
With this feature, users are able to enjoy seamless mobile connectivity and contactless applications such as payments, transit ticketing and digital ID.
With its Common Criteria Evaluation Assurance Level (CC EAL) 6+ certification, mobile users can be assured of high levels of data protection and encryption.
Service providers such as Vodafone are leveraging on eSIM to transform the enterprise connectivity model and in 2014, they acquired Cobra Automotive Technologies as part of their entrance into automotive software.
This move showcased how players from different industries such as carmakers and telcos are seeking to capitalise on eSIM technology and capture a wider share in the market by adding IoT into cars and other connected devices.
The future of eSIM
While eSIM has been slow to make it onto the mainstream market, as the eSIM activation process matures and stakeholders begin to overcome the barriers hindering the mass adoption of consumer eSIM, we will see a growing number of tech players and telecom providers enter the market.
We often associate eSIM with telcos and players in the mobile connectivity space, however the benefits of eSIM extend beyond that and give other players such as manufacturers a competitive edge in logistics.
Security risks are a key concern in the digital age. According to GSMA, as eSIMs rely on GSMA’s standards to create and ensure a fully interoperable ecosystem, it “offers an equivalent level of security and protection to that provided by the removable SIM card.”
We are in the midst of witnessing the revolution of 5G, IoT, Artificial Intelligence and Big Data, and with the ramp-up of eSIM capable devices, the future of eSIM looks promising.