According to the latest research by Omdia, as electronic SIMs (eSIMs) continue to be broadly embraced by consumer markets, the rapid advances in this technology are predicted to drive its adoption in the Internet of Things (IoT) sphere from slightly over 1 billion in 2023 to more than 3.6 billion by 2030.
The findings reveal that eSIM technology is contributing to greater efficiency within the cellular IoT market while equipping enterprises with increased versatility and choice. Prompted by the GSMA SGP.31/32 specifications, eSIM technology is primed for large-scale adoption, particularly in Low Power Wide Area Network devices. By reducing the complexity of shifting between network profiles, businesses can enjoy benefits such as more simplified device management, wider network coverage, and superior commercial terms.
eSIM technology has already seen extensive utilisation in consumer markets, notably within high-end smartphones and smartwatches. However, limitations relating to power, computing capacity, and user intervention have so far hindered IoT enterprises from fully tapping into the benefits of this technology. Encouragingly, Omdia indicates that these hurdles are beginning to be overcome as solutions emerge on the market.
Not only is the growth of the market being fuelled by developments in eSIM technology but also by other critical trends propelling IoT adoption. These include 5G RedCap, Massive IoT via 5G, 4G LTE Cat-1bis modules, and increased demands from enterprises.
John Canali, IoT Principal Analyst at Omdia, noted, “eSIM technology has long been seen as an important form factor for IoT devices, but now we are seeing the technology improve in ways that help enterprises provision over-the-air in resource-constrained IoT devices. 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 commented on the newly introduced GSMA SGP.32 eSIM specification. He stated, “The new GSMA SGP.32 eSIM specification was much needed and has been specifically designed for IoT. 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. This will help to accelerate adoption in key industries, not only those that have long desired eSIM standardization, such as automotive, but in a multitude of others also.”
Omdia's forecast for eSIM is backed up by primary data the research group collected from a survey involving over 700 global IoT enterprises. Around 90% of those surveyed expressed plans to adopt the eSIM/iSIM technology in the coming two years. Beyond heightened security, IoT enterprises prioritise the benefits of eSIMs for establishing more comprehensive and reliable networks, managing costs more effectively, and complying easily with local regulations.