Two of the most significant events for the eSIM global market—the 2nd World eSIM 2018 Summit and the Mobile World Congress—took place recently, giving us a chance to take the pulse of the global eSIM market.
One thing became clear from these events – eSIM is ready to make an impact in consumer IoT and M2M markets. And there are 3 reasons for this rational optimism:
1) People are getting mature in understanding what an eSIM is
Even though coming from different horizons, stakeholders (mobile operators, MVNO, MVNE, OEMs, eSIM providers, eSIM remote subscription management platform providers, service providers…) are now well knowledgeable about what an eSIM is. Basically, multiple mobile operators’ profiles can be generated and securely downloaded and provisioned over the air onto a soldered secure element set into the device, based upon GSMA’s Remote SIM Provisioning specifications. The main benefits of eSIMs seem to be well grasped by the industry:
i. Quicker, easier mobile connection — 60% of respondents of an Arthur D Little survey presented by Telefonica at the World eSIM Summit 2018, want effortless device activation
ii. Gaining physical place due to miniaturization, thus extending the reach to new consumer devices like smartwatches, wristbands and rings, and increasing the number of mobile connections
iii. Simplifying operators’ logistics
iv. Enhancing the overall customer experience – in particular, simplified user journey is made possible thanks to the digitalization of the MNO customer onboarding process
v. Overall cost reduction
vi. New revenue streams, coming from the increasing number of connected devices.
The eSIM has grown from its infancy to be endorsed by the main stakeholders of both consumer IoT and M2M industries.
2) eSIM is a reality endorsed by the stakeholders
A ’yes-we-can’ attitude has replaced the skeptical naysayers for eSIM adoption. As Telefonica UK’s technology strategy consultant Abdus Saboor stated, eSIM is now widely deployed in M2M markets such as automotive, smart meters or vending machines.
As far as the consumer IoT market is concerned, the demand traction is instrumental: according to Arthur D Little’s survey, 80% of consumers show interest in a mobile eSIM-enabled device. eSIM technology is increasingly and successfully being tested in secondary devices. With more eSIM-capable smartwatches and connected PCs being available, like Apple’s new SmartWatch, Microsoft’s new Surface Pro tablet, the Google Pixel 2 phone and other eSIM-compliant Android smartphones, opportunities have risen in the consumer IoT sphere.
But stay with me…here’s the tipping point:
The 2018 iPhone generation (i.e. iPhone Xs, iPhone Xs Max) bear eSIMs. 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.
Consequently more and more operators, including Telefonica, have deployed eSIM remote subscription management platforms for consumer devices. The adoption of this technology from top consumer brands has been a major breakthrough of 2017 for eSIM mass market adoption. Additionally, the successful heavy work around eSIM interoperability done in 2017, has set another track record.
3) eSIM M2M and consumer markets are different
Jean-Christophe Tisseuil from the GSMA recently stressed that although the two eSIM provisioning and activation architectures have a lot in common, M2M and consumer eSIM dynamics are different. However, they share the following four features:
- The eUICC and the eUICC manufacturer (EUM)
- The Mobile Network Operators
- Subscription Manager Data Preparation (SMDP) that is aimed at creating, generating, managing and protecting the eSIM profiles
- The Certification Issuer (CI) who issues certificates for remote SIM provisioning entities and acts as a trusted third party for authenticating the entities within the network.
The difference in the M2M market lies within the Subscription Manager Secure Routing (SM-SR). For example, in the automotive industry, a connected car can initiate a remote subscription update over the lifetime of the vehicle, even when the car changes ownership. A good example is the latest announcement of Brazil’s Embratel to transform the connected car experience in Latin America.
On the consumer IoT side, based upon GSMA’s SM-DS Root Service initiative, the Subscription Management Discovery Service aims at enhancing eSIM connectivity activation for consumer devices, by simplifying the customer experience of connecting an open market consumer device to the mobile network with the offer of their choice.
These two markets will now continue to evolve separately with different technical roadmaps and deployment schemes. On the short term, the priority is given to key topics such as eSIM use cases in:
- IoT (e.g. smart connected machines, connected cars, connected medical services, power meters)
- User eSIM on-boarding experience with eSIM orchestrator
- Digital mobile subscriber enrolment
- customer ‘lock-in’ (thanks to bundling of multiple devices on a single eSIM subscription/contract), and,
- introduction of new sales channels with OEMs.
The transition towards eSIM is inescapable.
But this good news does not necessarily mean complacency or blissful optimism. There’s still some work that needs to be done, which includes:
- Ensuring a massive adoption in the consumer space
- Continuing eSIM user experience improvement – this would be addressed by the 3rd phase of the Remote SIM Provisioning, anticipated to come end of 2019, via the advanced activation code
- Preparing and ensuring the successful arrival and take off of primary devices equipped with eSIM
- Allowing dedicated enterprise applications.
At last, with the advent of 5G – and the 5G SIM in particular, we’re now ready to deploy new roles for the eSIM in terms of 5G security, particularly in subscriber identity privacy, cyber resilience, 5G roaming or even network slicing authentication.
And remember that beyond the migration path from the removable SIM to the embedded SIM, there’s also the integrated SIM or iSIM. In May 2018, Gemalto announced a collaboration with Qualcomm Technologies to integrate eSIM innovation into the Snapdragon Mobile PC Platform: it paves the way for iSIM commercialization on a growing range of Always Connected PCs, laptops and tablets.
As a mobile operator or an OEM vendor brand, what’s your view here? Have I missed something important? Let us know your thoughts by tweeting to us at @ThalesDigiSec or leaving a comment below.
Feel free to read my other blogs and infographics on the eSIM here: