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The advent of embedded SIM (eSIM) technology is reshaping the landscape of the cellular Internet of Things (IoT) market, offering enterprises newfound efficiency and flexibility. A recent study by Omdia underscores the transformative potential of eSIMs, particularly in simplifying device management, expanding network coverage, and enhancing commercial terms for businesses.
eSIM technology has gained momentum, fueled by the GSMA SGP.31/32 specifications, which have paved the way for widespread adoption, especially in Low Power Wide Area Network (LPWAN) devices. By streamlining the process of switching between network profiles, eSIMs empower enterprises to manage their devices more effectively, access broader network coverage, and negotiate more favorable commercial agreements.
While eSIMs have already found success in consumer markets, particularly in premium smartphones and smartwatches, the complexities of power, computing, and end-user intervention have hindered their full potential in the IoT space. However, Omdia’s research indicates that these barriers are gradually being overcome as innovative solutions enter the market. This progress is expected to drive the adoption of eSIM technology in the IoT sector from just over 1 billion devices in 2023 to over 3.6 billion by 2030.
Several key trends are propelling the growth of the eSIM market in IoT, including advancements in eSIM technology itself, as well as the broader adoption of IoT facilitated by technologies such as 5G RedCap, 5G Massive IoT, and 4G LTE Cat-1bis modules, in addition to increased demand from enterprises.
John Canali, IoT Principal Analyst at Omdia, highlighted the significance of eSIM technology for IoT devices, noting, “This will create greater competition between communication service providers (CSPs), as IoT enterprises are less subjected to vendor lock-in by the CSPs and are better positioned to renegotiate connectivity tariffs.”
Andrew Brown, Practice Lead for IoT at Omdia, also emphasized the impact of the new GSMA SGP.32 eSIM specification, designed specifically for IoT. Brown noted, It offers significant advantages in terms of cost, flexibility, and longevity for hardware OEMs, finally beginning to bridge the gap between traditional consumer device provisioning and more traditional IoT devices.
Omdia’s optimistic eSIM forecast is reinforced by primary data collected from a survey of over 700 global IoT enterprises. Nearly 90% of respondents expressed plans to adopt eSIM/iSIM technology within the next two years. Beyond the enhanced security that eSIMs offer, IoT enterprises are attracted to the benefits of creating more reliable networks, managing costs, and easily complying with local regulations.
