Wednesday, December 7, 2022
The recent release of Apple’s highly anticipated iPhone 14 revealed a number of updates, notably Apple’s adoption of eSIM technology. The phone is one of the first mobile phones and indeed one of the first consumer products to swap out the traditional, physical SIM card for an eSIM, a design change that has garnered considerable attention. Apple argues that the eSIM is more secure than a traditional SIM, eliminates the need for a new SIM card when changing network providers, and lets customers maintain multiple eSIM profiles at once.
Apple’s decision to use eSIMs will especially benefit international travelers, who will avoid incurring expensive roaming fees by connecting to local networks while staying connected to their home network. Previously, travelers would have to buy a local SIM card to avoid roaming charges overseas.
As we have seen with biometric authentication, Bluetooth technology, and even headphone jacks, Apple’s strategic launches often force similar disruption across the industry. The eSIM already plays an important role in the IoT world, with many businesses having adopted eSIM technology for global IoT deployments. We will likely see even more manufacturers realize the benefits of eSIM across many industries, especially as IoT deployments continue to increase rapidly.
Getting operators on board
While tech giants such as Apple and Google are adopting eSIMs, the potential benefits of this technology — flexibility, security, reliability, and longevity — will not be impactful if mobile network operators (MNOs) do not support it. As they make eSIM profiles available to subscribers, MNOs also need to make the necessary updates to associated billing and provisioning systems.
As with any new technology, there is still some concern and caution about the shift to eSIMs. This is clear when considering eSIM support from MNOs. First, eSIMs let users easily switch network providers. This is great for consumers, but network operators may worry about the impact on customer loyalty and pricing. MNOs could be compelled to lower the price of services to compete.
Second, eSIMs pose new challenges for operators when onboarding their customers. To set up an eSIM, customers can either use a QR code or download an app. Both options make the task easy for consumers. But for operators, implementing these features can be a complicated and lengthy process. Additionally, it can be costly and technically difficult for networks to introduce eSIM support, creating more barriers to the adoption of eSIM technology.
Once operators overcome these initial hurdles, however, the many benefits to using eSIMs can help with wider IoT deployment.
As MNOs upgrade their provisioning mechanisms to support the deployment of eSIM profiles, by default they gain the ability to service IoT customers in addition to their traditional consumer businesses, in line with the new eSIM SGP.22 standards. Traditionally, profile donation to IoT projects was an expensive and challenging activity in which to partake. With the eSIM transition, the availability of profiles across a wider selection of MNOs will provide increased competition in the IoT space, giving OEMs the ability to manage more of their own connectivity requirements.
The benefits of wider IoT deployment
As we’ve seen before, Apple’s adoption of new technology not only creates interest and hype around the technological advancements but also sees its competitors follow suit. Analysts thus are waiting with bated breath to see how Apple’s adoption of eSIM will disrupt the wider IoT industry.
IoT deployments are increasing rapidly. In fact, IDC has predicted that there will be 41.6 billion IoT devices by 2025, and eSIMs top the list of options for ensuring connectivity. Using eSIMs provides a cost-effective way to connect products and devices in international markets and averts the need to maintain separate SKUs, which helps reduce manufacturing costs and streamlines manufacturing processes for products that may be distributed in the thousands. In this way, eSIMs are effective in streamlining the supply chain and thus provide major logistical benefits.
The benefits are not only seen at the point of manufacturing and across logistics; eSIMs also help to future-proof devices so that they are not locked into a particular mobile network. Because eSIMs enable new profiles to be downloaded and switched over the air (OTA), it no longer becomes necessary to physically change an IoT device SIM in response to commercial, technical, regulatory, or locational factors.
eSIMs also provide an easy way to navigate regulatory restrictions, benefiting both consumers traveling across international borders countries and businesses rolling out global deployments. Because of network sunsetting, data sovereignty, and regulatory challenges in specific regions, global deployments were previously considered too risky for some companies to undertake as they looked to expand into additional IoT markets.
Expect eSIMs to accelerate global IoT deployments and take the risk out of entering international markets. Manufacturing costs will be made more predictable, with single SKUs introducing more control for manufacturers and simplifying the supply chain. Global rollouts will be streamlined thanks to the ability to provision operator profiles quickly and remotely. With Apple’s adoption of eSIMs, other smartphone producers are sure to follow. eSIMs are set to disrupt the IoT industry and accelerate IoT global deployments, making the use of eSIM technology mainstream.
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