Accelerating adoption of embedded SIMs (eSIMs) is poised to reshape the cellular IoT landscape, driving growth and market disruption.

As the virtual evolution of traditional SIM cards, eSIMs offer benefits such as cost reduction, operational efficiency, and enhanced security. As eSIM adoption gains momentum, it is set to impact various aspects of the cellular IoT ecosystem, influencing market dynamics and contributing to the continued growth of cellular-based solutions in the enterprise IoT services market, according to GlobalData, a leading data and analytics company.

In case of eSIMs, the subscriber identification is downloaded to an embedded universal integrated circuit card (eUICC). Functioning as a software-based solution, eSIMs will soon be able to take advantage of a new industry standard that empowers remote deployment and programming. This flexibility enables cellular operators, device manufacturers, users, or third-party eSIM managers to seamlessly program devices for network operator switches, eliminating the need for physical SIM card replacements.

John Marcus, Senior Principal Analyst, Enterprise Technology and Services at GlobalData, says: “eSIMs have been around for a few years, but it is fair to say that before now there has been much more enthusiasm on the part of users and device makers than mobile network operators, which have viewed them as a threat. That is starting to change, following the publication of a new industry specification for IoT eSIM earlier this year.”

GlobalData analysis finds there are several benefits of eSIM adoption in IoT, including cost reduction for operators, users, and device manufacturers, diminished hardware and operational expenses, simplified installation and deployment processes, heightened flexibility, and improved security measures.

Marcus observes: “While eSIM represents nothing but upside for manufacturers of IoT devices and connected products, the trend is likely to impact—one way or another—all areas of the cellular IoT ecosystem.”

According to GlobalData’s most recent forecast, cellular-based solutions will continue to account for the largest slice of the enterprise IoT services market through 2027, growing slightly faster than the overall market at 17.3% CAGR. eSIM adoption will be driving part of that growth (along with upgrades from 2G-3G switch offs, 5G adoption, and private cellular connectivity).

The report notes the GSMA’s new eSIM specification, SGP.32, designed specifically for IoT. This specification replaces the old M2M eSIM standard, offering simplified remote provisioning with an IoT Manager module and an embedded IoT Provisioning Assistant. The automated profile switching capabilities of SGP.32 present numerous advantages for OEMs and users, including increased flexibility, longer lifespan, lower costs, and benefits for device makers, fostering global product development.

Marcus concludes:

“In addition to the positive implications of automated profile switching enabled by the standard, it brings challenges such as the potential for increased competition for IoT service providers and a shift in control dynamics among the operator, SIM, and device.”

The post eSIM adoption drives growth and market disruption in cellular IoT, says GlobalData appeared first on IoT Business News.