According to Allied Market Research, the cellular M2M market was valued at USD 10.6 billion in 2020. It is expected to grow at a 23.2% compound annual growth rate and reach USD 83.23 billion by 2030.
The machine-to-machine subscriber identity module or the M2M SIM is a critical component of this growth, of course. M2M devices, like automobiles, smart metres, points of sales, digital signages, and medical devices, require an M2M SIM so they can use cellular networks to communicate with or exchange data with other machines, servers, programs, and services.
The development of the embedded SIM or eSIM specification means even better functionality and flexibility for M2M device manufacturers.
The eSIM Specification
The eSIM specification by the Global System for Mobile Communications Association or GSMA provides a single standard mechanism for the remote provisioning and over-the-air management of M2M connections.
It is different from the traditional M2M SIM specification.
Conventional M2M devices have a physical SIM card slot. When the device is deployed, a removable M2M SIM card is inserted into the SIM card slot. It does what it’s supposed to do; that is, connect the device to other machines and servers and exchange data with these connected devices through cellular networks.
In the newer eSIM specification, the SIM is a chip instead of a removable card. It is embedded or soldered into M2M devices during their manufacture. Thus, eSIM M2M devices do not need a physical SIM card slot.
There are hybrid applications of the eSIM specification that use removable physical SIM cards instead of embedded SIM chips. These are being used with legacy M2M devices that do not have embedded SIM chips and will take only physical SIM cards.
In this case, the eSIM specification is embedded in physical SIM cards. They are then used to replace old M2M SIM cards on legacy systems. Consequently, legacy M2M devices can function like eSIM devices; they, too, could be provisioned and managed remotely going forward.
How M2M Product Manufacturers Benefit From eSIM
The eSIM specification benefits different stakeholders, including operators, SIM suppliers, business customers, and end-users.
The following are five ways by which eSIM benefits M2M product manufacturers.
1. Streamlines the Supply Chain
The key advantage that the eSIM specification provides M2M product manufacturers is how it simplifies logistics.
M2M product manufacturers only need to maintain one SIM stock-keeping unit or SKU for all of their M2M products at the point of manufacture. Before the advent of eSIM, they would have to maintain multiple SIM SKUs.
This is a clear logistical advantage as it streamlines an organisation’s supply chain.
2. Opens Up New M2M Market Opportunities
M2M product manufacturers can use eSIM technology to expand their product offerings.
For instance, if they cannot manufacture specific devices because of form factor limitations (i.e., the physical SIM card slot requirement), they could manufacture them now with eSIM.
3. Enables Global Expansion
M2M product manufacturers can now expand into more markets. They can collaborate with distributors and sell to industrial M2M clients from all over the globe.
Through eSIM, M2M devices are practically usable anywhere in the world. Their eSIM component makes them ready to connect and interface with local operators. eSIM M2M devices select their operator subscription only at first switch in the device’s destination country.
Industrial M2M device users are not limited by geography in their choice of M2M product suppliers. They can transport their M2M devices to wherever they need to be deployed. Once in their destination country, these devices may be remotely but securely provisioned with an appropriate operator profile.
4. Enhances Product Marketability
Since operator profiles may be downloaded to M2M devices as needed, eSIM M2M devices are not tied to any single operator. This ensures industrial M2M device users can maximise their M2M assets; they can repurpose, redistribute and reuse them as their operations require. M2M product manufacturers can use this to market their products to their clients.
Why is this an advantage? Shouldn’t traditional M2M devices be the same — i.e., not tied to any single operator?
Technically, yes. One can replace the SIM cards on an M2M device, so industrial M2M device users should be able to change operators.
However, in practice, the removable SIM cards of conventional M2M devices are often located in inaccessible wireless modules. Thus, once an M2M device has been deployed, it can be challenging, if not outright impossible, to replace the SIM card on it and its operator.
This can be a significant problem for industrial M2M device users that would often transport M2M assets over borders. What if these M2M assets’ current operator does not operate where the assets are going? There are workarounds, of course (e.g., roaming), but such solutions can be expensive.
In contrast, M2M enterprise clients don’t need to remove SIM cards from eSIM M2M devices. After transporting their M2M assets to a new destination, they can easily change the operator on these assets over the air.
Their eSIM device’s ability to change operators during the device’s life cycle is another selling point manufacturers can use to market their products to industrial M2M clients.
To maintain or improve their competitive advantage or reduce their operating costs, industrial clients may find it necessary to switch operators many times throughout the lifecycle of their M2M devices.
eSIM M2M devices are very flexible in this regard, since eSIMs can store multiple operator profiles and switch to a different operator profile as needed. Furthermore, an applet can be used to automate network switching based on pre-set parameters, such as signal strength, stability of connection and data costs.
For instance, a company that manufactures plastic pipes for construction may want the M2M trackers on their fleet of trucks and vehicles to have the ability to switch operators as needed to ensure continuous data transmission or to minimise costs.
5. Improves M2M Product Longevity
In eSIM M2M devices, the SIM chip is embedded into the device. eSIM M2M devices do not have a physical SIM card slot. This is why eSIM M2M devices typically have hermetic seals.
In other words, eSIM M2M devices are airtight. This characteristic improves their longevity or their serviceable life expectancy. If dust, liquids, gases and other substances cannot go in, M2M devices are less likely to get damaged.
Switch to eSIM
The eSIM specification provides many benefits to M2M product manufacturers.
It opens up new business opportunities, simplifies logistics, improves product longevity, and enables manufacturers to expand into new markets and enhance the marketability of their products.
Read more: The Future of the Internet of Things Explained in a Simple Way