The automotive sector is leading the charge in adopting embedded SIM (eSIM) technology for Internet of Things (IoT) applications, according to a recent study by GSMA Intelligence.
As eSIM capabilities are increasingly integrated into new connected vehicles, collaboration between mobile operators, eSIM providers, and automakers is intensifying. Regulatory requirements for emergency call (eCall) functionality are also accelerating eSIM deployments across the automotive industry.
Although eSIM is now well established in connected cars, adoption in other industries has not yet reached the same scale. Several emerging trends, however, are expected to speed up eSIM uptake in IoT markets from 2024 onward:
- Ongoing industry efforts to improve eSIM specifications for IoT, including the GSMA’s SGP.32 technical specification and SGP.33 test specification tailored to IoT needs.
- The rollout of new IoT technologies such as 5G RedCap and satellite connectivity, with trials already in progress across multiple regions.
- New eSIM products and global-capable solutions launched by SIM vendors, expanding coverage and deployment options.
- Rising deployment of private wireless networks, which provide additional use cases for eSIM-enabled devices.
- Growing recognition of eSIM as a supporting technology for sustainability initiatives.
- Operator surveys identify security and scalability as the top enterprise benefits of eSIM. Providers are highlighting secure authentication and stronger data protection to attract business customers. In addition, eSIM’s ability to remotely manage and update large device fleets simultaneously is viewed as a core scalability advantage.
The market opportunity for eSIM in IoT is substantial. While most cellular IoT devices today still rely on removable SIM cards, forecasts indicate that eSIM will claim a larger share over the coming years. By 2030, operators expect eSIM to represent about 37% of cellular IoT connections, with integrated SIMs (iSIM) at 34% and removable SIMs at 29%.
Industry verticals are key drivers of eSIM adoption, with smart cities seen as the most promising market. Operators anticipate heightened demand for eSIM-enabled solutions across multiple sectors, and they identify smart cities as the vertical with the strongest expected demand for eSIM during 2024–2025.
Despite meaningful progress, significant room for growth remains for eSIM in IoT markets.
The study highlights several enterprise challenges that must be addressed for wider eSIM deployment, including integration with legacy systems, security concerns, and implementation costs. Establishing and adhering to global standards and technical specifications is viewed as critical to resolving interoperability and integration obstacles.
Enterprises regard eSIM as a pivotal technology for future IoT projects, especially because of its security and scalability benefits. To capture enterprise demand, operators should align their eSIM offerings with business expectations and collaborate on global security and interoperability initiatives.
(Photo by why kei on Unsplash)
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