Embedded Cellular Connectivity: How Apple eSIM-Only Smartphones and The SGP.32 Specification Is Changing The eSIM Adoption Paradigm

Embedded connectivity across consumer, Machine-to-Machine (M2M), and Internet of Things (IoT) applications continue on a positive growth trajectory. In the cellular domain, Embedded Subscriber Identity Module (eSIM) technology adoption, which allows remote selection and switching of carrier networks, has been and will continue to be a major catalyst for growth. Much of the underlying groundwork for standardizing eSIM has been completed thanks to the ongoing focus on developing and evolving different Remote SIM Provisioning (RSP)-capable SIM form factors. Thanks to these developments, shipments of eSIM-capable devices reached 446 million in 2023, nearly 2X more than 5 years ago.

Although eSIMs were originally designed for M2M applications, most notably automobiles, the near-term focus has been on the consumer market. This has been driven by the now well-established SGP.22 specification, supported by a host of eSIM- ready smartphones and, more recently, the eSIM-only Apple smartphone launch in the United States.

These developments are helping move the consumer adoption needle from eSIM being a nice to have, to a necessity within the operator community. The consumer market clearly demonstrates how a market, backed with a fit-for- purpose specification can succeed. Apple’s use of eSIM across its entire range of smartphones, alongside Samsung and Google, which have been integrating eSIM technology within Galaxy S, Fold, Flip, and Pixel devices for a number of years, have been joined by a host of other smartphone Original Equipment Manufacturers (OEMs), including OPPO, Xiaomi, Sony, Nokia, Motorola, HONOR, OnePlus, and vivo. Although most OEMs are using eSIM within flagship smartphone devices today, the market indicators are that movement into mid-range smartphones is fast approaching, with Samsung first to move with the launch of its A54 eSIM supporting smartphone in 2023. Mid-range eSIM integration will help further accelerate the market with consumer eSIM device shipments forecast to grow from 309 million in 2023 to 597 million by 2028.

Despite the clear success within the consumer market, M2M/IoT applications’ use of eSIM, outside of automotive, have been few and far between. This is now changing, thanks to the development of the SGP.32 specification, which is purpose built to address a wide range of other IoT devices, including those power constrained in nature or those that do not support Internet Protocol (IP). SGP.32 will break down Go-to-Market (GTM) barriers, allow the use of existing Subscription Manager Data Preparation (SM-DP) infrastructure, provide a provisioning mechanism that recognizes the capability of a device, and then define whether that device should be provisioned over Short- Messaging Services (SMS), IP, or another channel.

Although the SGP.32 specification remains in development, a major milestone was reached in July 2023, when the technical specification was ratified and released. Work on the specification continues focusing on interoperability and certification, but industry- wide expectations are that Proof of Concept (PoC) SGP.32 connections will come online in 2024, followed by commercially available devices hitting the market in the 2025 time frame. This will create a new embedded connectivity adoption boost for applications that include asset trackers, smart labels, and water and gas smart metering solutions, with eSIM-ready device shipments growing from 178 million in 2025 to 305 million in 2028. The sleeping giant of the IoT market is poised to awaken and is now geared for mass adoption and support. Understanding embedded connectivity IoT adoption and specification development timelines is crucial for implementing product development and market strategies. Determining how to best support, while understanding what else can be achieved through embedded connectivity, and how it can play into your organization’s wider digitization strategy, are all critical components to understand in order to help your enterprise make the most informed investment and GTM decisions.

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IoT Embedded Connectivity Is More Than A Connection: How Can It Help Your Organization?

Enterprises continue to ramp up their digital transformation efforts, introducing more and more connected devices. Despite the fact that each device type or fleet of devices requires reliable connectivity services, no matter where they are transported to/from, they possess their own unique set of requirements. The requirements relate not only to connectivity, but also encompass ongoing management and maintenance of the device or fleet. Manually managing fleets of devices or aligning with traditional connectivity and platform services is impractical for most, and cost- prohibitive for many. Embedded connectivity presents a new market paradigm and way of thinking about connectivity and connectivity services with flexibility, customization, scalability, reliability, and automation at the heart of embedded connectivity technology, as well as the supporting platforms and services.

These five key attributes make embedded connectivity an incredibly powerful tool, designed to help enterprises optimize and automate workflows, while realizing global growth ambitions through flexible and customizable cellular connectivity subscriptions, and tailor-made services and platforms that are fit for purpose and last the test of time.

On top of the five key attributes are several other embedded connectivity supporting requirements related to business models and technology.

What Does This Mean For Your IoT Connectivity Strategy?

IoT connectivity can mean different things to different enterprises. Fortunately, the breadth of enterprise requirements is driving innovation in the space.

Device longevity, data consumption levels, device location/mobility, level of security, latency requirements, device real estate, and power consumption are all areas that can differ depending on the IoT application in question. Each of these, or a combination thereof, can lead to significantly different connectivity requirements. Consequently, enterprises will ultimately have to adopt different approaches and strategies based on their unique set of priorities.

With the SGP.32 specification on the horizon, organizations need to factor in some key considerations when planning their respective IoT cellular digitization strategies to ensure a smooth business and operational transition:

  • Enterprises must identify what their specific IoT digitization requirements are, and then map these to their embedded connectivity partners’ solutions.
  • Embedded connectivity platforms are much more than a cellular enablement tool, therefore no longer a case of connect and forget. They are designed with customization in mind with the potential for applying intelligence at the back end to help further optimize and automate processes.
  • IoT devices can be out in the field for decades. Enterprises need to ensure that they are partnering with a trusted and reliable connectivity partner, which has demonstrated itself as a longstanding, reliable source for cellular service delivery.
  • Alongside partnering with a trusted and proven connectivity partner, enterprises should also look closely at potential embedded connectivity partner capabilities, particularly as it relates to their ability to support embedded connectivity at the point of device assembly, manufacture, or distribution via zero- touch enablement, further supported by orchestration capabilities.
  • Security should be at the forefront of all embedded connectivity deployment strategies. Security and embedded connectivity are intertwined, and the use of a physical tamper-resistant piece of hardware and/or containerized solutions within a processor or even the cloud means that security can be integrated and implemented at the device design phase.
  • Embedded connectivity platforms are agnostic and not tied to the embedded connectivity form factor used within devices. Regardless of which form factor is used in a device (Embedded Universal Integrated Circuit Card (eUICC), Integrated Subscriber Identity Module (iSIM), CloudSIM, etc.), your connectivity partner should be able to support that specific form factor.
  • Keep close tabs on the SGP.32 specification work by GSMA. While v1.0.1 got the ball rolling, this was only the first technical step in a series of upcoming version releases that will further improve eSIM capabilities in the IoT.
  • SGP.32 should form part of any new tender process. If deploying before the release of SGP.32, then outline a migration path toward the new specification.
  • Do not view eSIM as a product, but as a service offering. At the heart of RSP and lifecycle management capabilities are software platforms that allow you to manage fleets of IoT devices remotely. When weighing options, it is important to consider the functionality, ease of use, and user interface of the embedded connectivity platform.
  • Consider a partnership with a Mobile Virtual Network Operator (MVNO). They have connectivity agreements in place to ensure global connectivity and can be more flexible and cater to specific needs. Tier One Mobile Network Operators (MNOs) remain focused on significant volume customers, so smaller fleet deployments should seek MVNO expertise to ensure consistent levels of service and support.

Tata Communications MOVE Enabling Embedded IoT Connectivity

The Tata Communications MOVE™ platform is well positioned to support enterprises in enabling embedded connectivity. Tata Communications has the partnerships, capabilities, and supporting tools in place to help organizations execute on their digital transformation strategies. Its MOVE platform is designed with simplicity, flexibility, and scalability in mind. The MOVE platform is built to reduce GTM barriers, reducing the burden of significant investment in the device connectivity design phase. At the same time, Tata Communications is supporting enterprises across the entirety of their connected device lifecycles. This includes initial wake-up and connectivity management, using any network of choice, through the ongoing lifecycle and management of the device orchestration capabilities in place to provide a single pane of embedded connectivity glass.