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eSIM/iSIM market to cross 500 million units in 2023: IoT Analytics
Thu, 3rd Aug 2023

According to IoT Analytics, a provider of market insights and strategic business intelligence for the Internet of Things (IoT), the eSIM/iSIM market is set to surpass 500 million units in 2023 as it brings the new age of cellular IoT. 

This is according to IoT Analytics’ new Global IoT eSIM Modules and iSIM Chipsets Market Tracker, which provides quarterly data on worldwide IoT eSIM modules and iSIM chipsets from 2018 to Q1 2023.

“Looking ahead, it's evident that eSIMs are positioned to become the primary SIM technology in the next 2-3 years, surpassing their counterparts. This shift is expected to be followed by the emergence of iSIMs, which are predicted to gain popularity due to their advanced security features, including a hardware root of trust. We'll likely see a gradual transition from eSIMs to iSIM technology, as iSIMs are expected to become the preferred choice in the long term due to their inherent security advantages,” says Satyajit Sinha, principal analyst at IoT Analytics.

As part of IoT Analytics’ expanding market coverage of IoT markets, IoT Analytics launched its in-depth Global IoT eSIM modules and iSIM chipsets Tracker this month. This database provides a quarterly look at the shipments of 35 companies providing cellular IoT modules embedded with eSIM/iSIM for IoT deployments. The database provides insight into the shipment of modules capable of eSIM and the chipset of iSIM. It looks quarterly at the shipments of 35 companies providing cellular IoT modules embedded with eSIM/iSIM for IoT deployments. The database provides insight into the shipment of modules capable of eSIM and the chipset of iSIM. The database does not include the activation data of the eSIMs and iSIMs.

The rise of eSIM/iSIM technology is not just a mere technological advancement but a paradigm shift. It is about the seamless integration of IoT devices, the simplification of connectivity, and the enhancement of user experience. Using eSIMs/iSIMs can help businesses decrease time to market and improve the efficiency of IoT deployments.

This technology offers several advantages over traditional SIM cards, including increased flexibility for IoT solutions. eSIM/iSIM technologies provide increased flexibility and reduced provisioning time for IoT devices. By allowing devices to be remotely provisioned with different carrier profiles, they enable seamless switching between networks without needing physical SIM card changes. This flexibility benefits businesses deploying IoT devices in multiple countries or regions. Additionally, remotely provisioning and updating eSIM/iSIM saves time. It simplifies the deployment process, especially in large-scale IoT deployments, empowering businesses to adapt quickly and optimize their IoT deployments.

Several car companies, including BMW, Audi, Tesla, and Volkswagen, have implemented eSIM technology to offer connected car services. These companies can remotely activate, manage, and switch mobile network profiles through their respective platforms. This allows for more flexibility and scalability in IoT deployments.

eSIM and iSIM technology allows for more compact IoT device designs. This makes devices smaller and more lightweight than traditional SIM-card-based devices. Notably, eSIM/iSIM technology has facilitated the development of smart labels, paper-thin devices that offer precise, accurate, and secure tracking of small and lightweight items.

DB Schenker, the logistics arm of Deutsche Bahn, implemented an ultra-thin smart-label solution to track small freight consignments globally. Sensos, an Israeli group company of the Sony Semiconductor Solutions Corporation, developed the solution, which leverages Kigen’s iSIM technology embedded within Sony Semiconductor Solutions’ low-power wide-area (LPWA) chipset.

eSIM/iSIM technology incorporates embedded secure elements, providing advanced security features compared to traditional SIM cards. The secure element is a hardware root of trust for asymmetric encryption, ensuring secure end-to-end communication. The GSM Association's (GSMA) IoT SAFE specifications leverage a single eSIM/iSIM as a hardware root of trust. Meanwhile, chipset vendor Sony Semiconductor Israel's ALT1250 and ALT1350 chipsets integrate two secure elements for application security and UICC identity (Sony Semiconductor Israel was formerly known as Altair Semiconductor and is now a group company of Sony Semiconductor Solutions Corporation).

The eSIM in Tesla vehicles enables features such as remote vehicle monitoring, software updates, and over-the-air (OTA) updates for the vehicle's firmware. The eSIM is a hardware root of trust by securely storing cryptographic keys and certificates for authentication and encryption.

eSIM/iSIM technology eliminates the need for physical SIM cards, reducing electronic and plastic waste. Additionally, the elimination of physical SIM card shipments to IoT modules or devices helps reduce emissions associated with transportation. These environmental benefits make eSIM/iSIM a sustainable choice for IoT connectivity.

Per IoT Analytics’ Global IoT eSIM Modules and iSIM Chipsets Tracker, eSIM penetration within cellular IoT modules experienced a significant increase, with quarterly shipments of eSIM-capable modules rising from 7% in Q1 2018 to 31% in Q1 2023. “Notably, there was a period of stagnation in this growth during 2021; however, from Q1 2022 onward, we observed a consistent adoption rate through Q1 2023,” say researchers at IoT Analytics. 

Meanwhile, iSIM is still an emerging technology in IoT. Sony Semiconductor Israel’s ALT1250 is the only iSIM-based cellular IoT chipset that reached mass shipments.

So far, the implementation of eSIM/iSIM IoT standards has been slower than initially anticipated. This is primarily due to the complexities of remote SIM provisioning and different standards for consumer IoT and machine-to-machine (M2M) technologies.

To address this issue, GSMA developed new eSIM IoT specifications, namely SGP.31 and SGP.32, designed to complement the existing M2M (GSMA SGP.02) and consumer IoT (GSMA SGP.22) eSIM standards. The new specifications allow for remote control and configuration of eSIMs via a dedicated management module, adapting from the current eSIM Consumer and IoT Specification.

This approach eliminates the need for user interaction when provisioning, simplifying IoT connectivity and reducing the time to market for IoT deployments. Moreover, this enhancement may eliminate the need for carrier integration, giving enterprises the same flexibility and control as consumers, thus marking a significant advancement for IoT implementations.

The release of GSMA SGP.31 and SGP.32 marked significant changes in eSIM IoT deployment in three ways: introducing the eSIM IoT Remote Manager (eIM); transforming Local Profile Assistance (LPA) into IoT Profile Assistant (IPA); and replacing Subscription Manager Secure Routing (SM-SR) with Subscription Manager Discovery Server (SM-DS) and IPA in the architecture. These changes streamline remote profile management and provisioning processes and eliminate the need for SM-SR in eSIM IoT deployments.

“Looking ahead, we expect eSIM/iSIM technology to further increase its penetration in the cellular IoT market,” adds IoT Analytics in its report. 

“Currently, the market is still dominated by a combination of physical SIM cards, uSIM, and soft SIMs (software-based UICCs in a trusted execution environment), with a combined (shipment-based) market share of approximately 67%. As the industry progresses, we assess that eSIMs will become the dominant SIM technology in the next 2–3 years. Afterward, with the next cycle of module hardware, iSIMs are likely to start grabbing market share since they offer enhanced security features and are anchored with a hardware root of trust, making them a more secure option. In the long run, it is expected that even the eSIM market will migrate toward iSIM technology, with iSIM then dominating the market.”

IoT Analytics names two factors that will likely drive the growth of eSIM and iSIM in the cellular industry.

The importance of robust security measures in cellular IoT cannot be overstated. Cybersecurity regulations are pivotal in strengthening IoT security, mainly by implementing hardware-based solutions.

Given the recent activity around EU and US technology regulation, it is likely that the coming years will see new laws mandating more robust IoT security, potentially requiring the use of a hardware root of trust.

In this context, eSIM/iSIM technology is a practical solution for implementing chip-to-cloud security. By leveraging the secure element as a hardware root of trust, it is possible to enable asymmetric encryption, thereby bolstering the overall security framework. Notably, cellular IoT vendors are already guided by GSMA's IoT SAFE specifications, which provide valuable insights and guidelines in this area.

GSMA's SGP.31 and SGP.32 will play a crucial role in the future of eSIM/iSIM in cellular IoT. By streamlining the remote profile management and provisioning processes, these specifications will simplify the deployment of IoT devices and reduce the time to market. Furthermore, the introduction of eSIM and the transformation of LPA into IPA will provide businesses with greater control over their IoT deployments, enabling them to adapt quickly to changing market conditions and customer needs.