The subscriber identity module (SIM) was central to the rapid spread of the mobile phone, securely storing the subscriber's identity when the device was connected to the network.
But as machine to machine (M2M) communications developed and enabled all kinds of devices to be connected, from energy meters to cars, the limitations of the SIM became apparent. It needed to be accessible, was not sturdy enough to withstand extreme temperatures or shocks, and was too large for some intended uses.
The embedded SIM (eSIM) solves all these problems and creates new opportunities for manufacturers and mobile network operators (MNOs).
1. They are rugged
The eSIM can be soldered in place inside a device and then sealed, making it water- and temperature-resistant. This makes it more robust and thus ideal for use in a connected car, for example, which may well be driven in extreme heat and on bumpy roads.
2. They can be connected remotely
Multiple mobile operators' profiles can be generated and securely downloaded and provisioned over the air onto an eSIM, based upon the Remote SIM Provisioning specifications set out by the mobile operators' trade body, the GSMA.
As well as industrial uses, this has major benefits for manufacturers of consumer devices. In a survey presented by Telefonica at the World eSIM Summit 2018, 60% of respondents said they want effortless device activation, and the eSIM provides that; when buying a wearable, a tablet or a smartphone containing an eSIM, a consumer can activate connectivity at the point of sale.
3. They are small
According to Jean-Christophe Tisseuil, Head of SIM Technology at the GSMA, "the space saved by embedding a SIM can be as much as 90% on a physical card." Thanks to this, the reach of the eSIM extends to new consumer devices like smartwatches, wristbands and rings, increasing the number of mobile connections, and thus the size of the potential market for MNOs.
4. They are interoperable
The GSMA brought together 40 players from across the eSIM ecosystem to agree a standard that enables users to easily switch between any available network.
5. They are secure
An eSIM is not software, but sending profiles over the air could, in theory, introduce a risk of hacking. To combat this, the GSMA has worked with MNOs and other stakeholders to guarantee the secure encryption and transportation of operator credentials.
6. They streamline logistics for MNOs
MNOs used to have to deal with the logistics of handling millions of SIM cards. Now, with the availability of eSIMs, they can develop truly digital experiences for their subscribers, while reducing the burden on their supply chain and gaining customer loyalty.
7. Consumer brands are adopting them
The consumer IoT market is increasingly adopting eSIMs in devices from computers to wearables. Notable products with eSIMs include Apple's SmartWatch, the Google Pixel 2 phone and the Microsoft Surface Pro tablet. This again creates exciting new opportunities for MNOs.
2018 iPhone generation (i.e. iPhone 9, iPhone X(s) and iPhone X(s) Plus) is rumored to bear eSIM. With almost 1.25 billion units sold since 2007, Apple's flagship smartphone represents a fantastic, widely-spread platform for new usage education and massive eSIM awareness among consumers worldwide.
8. They are still improving
The third phase of the Remote SIM Provisioning specifications, which is expected to be released in the second half of 2018, promises to create an even better user experience.
9. They will power the future
With 5G connectivity set to radically alter mobile services, the eSIM will play an integral role. When 5G becomes standard, devices containing them will possess processing power that is incredibly robust, and will rely on the eSIM to manage their connection.
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