Beyond Connectivity, eSIM Can Be the Trust Anchor to Enable New Services

Over the past year, the focal area of the Embedded Subscriber Identification Module (eSIM) has somewhat shifted, with attention moving away from Machine-to-Machine (M2M) and newly connected assets within the wider Internet of Things (IoT) domain and toward consumer devices, due in large part to Apple’s launch of its eSIM-enabled XR and S range of iPhones.

Despite the rise of the consumer, it must be noted that the origins of eSIM reside within the M2M/IoT space that originally drove the need for an embedded form factor and subsequent remote provisioning development. As it relates to SIM cards, the M2M market, which encompasses both removable and physically embedded variants, is the fastest growing part of the SIM cards market. It is growing at such a pace that it is offsetting reductions from the traditional handset side of the SIM business.

According to ABI Research’s SIM Cards (MD-SCSC-21) Market Data, M2M connections are forecasted to grow from 493 million in 2018 to over 1 billion by 2023. The connection is one aspect, but more important is the volume of SIM, as it will be remote-subscription capable. This functionality will pave the way for a host of other added value services, such as lifecycle management and security.

Forecast Outcome:

• The automotive market is expected to continue its dominance as it relates to eSIM integration. This integration was initially driven by initiatives of legacy applications, including eCall and User-Based Insurance (UBI), and is further driven by longer term trends, largely Over-the-Air (OTA) updates.
• Although the total available market within the automotive sector stands at approximately 90 million to 100 million units annually, the automotive sector will begin to adopt multiple eSIMs per vehicle to address two channels. First, one eSIM will allow the Original Equipment Manufacturer (OEM) to manage the vehicle and another eSIM will be used for consumer infotainment purposes. Second, there may be a requirement for multiple OEM eSIMs to separate eCall functionality from that of an OEM cellular channel.
• The market for asset tracking remains in an extremely nascent phase but is one of great opportunity, particularly for use within high-value containers and/or within the industrial category to track and trace high-end/value field equipment.
• Energy management is another expectant opportunity, with volumes primarily driven by the smart meter category.
• The “others” category is vast, encompassing multiple use cases across a variety of sectors—most notably fleet management but also including Point of Sale (POS); Automated Teller Machines (ATMs); industrial grade modems, routers and gateways; connected kiosks; agriculture; and use cases within the wider smart cities initiatives, to name a few.
• However, it must be noted that only a small proportion of M2M Form Factor (MFF) SIMs today are Remote Subscription Management (RSM) capable. Just because the SIM is embedded does not automatically mean that it is eSIM compliant as defined and specified by the GSMA.
• This is likely to change as users look to take advantage of remote management capabilities, including the ability to securely provision OTA to enable secure OTA updates and remote lifecycle management.

Cellular connectivity and security are beginning to be spoken about as one and the same, particularly from an IoT perspective. This is a far cry from a few years ago, where primary efforts were being placed on connecting objects with security largely an afterthought.

Through continual education, OEMs and service providers are beginning to understand the additional benefits that a tamper-resistant piece of hardware can enable. This is supported by vendor strategies looking to combine cellular connectivity and secure element functionality in a monolithic chipset approach, most notably by STMicroelectronics, Infineon, and NXP. The ability to securely connect and provide secure storage and management capabilities is helping to educate the wider industry about the link between connectivity and security.

The automotive market is a perfect example, demonstrating how and why connectivity and security is converging. A constant and reliable cellular connection is required to enable Vehicle-to-Everything (V2X) and Vehicle-to-Vehicle (V2V) communications as one example. But beyond offering a secure connection to a network is the ability to use the tamper resistant secure element to store and manage crypto keys and certificates. The eSIM can additionally be used as that trust anchor from which new services can be offered, including personalization, in-car payments, full lifecycle management, digital key entry, engine start, and wellness and health applications, as well as for Vehicle-to-Home (V2H) automation.

These new types of services are largely greenfield revenue opportunities and service which automotive OEMs will be keen to enable and tap into. However, the ability to deliver these types of services will be closely tied to the ability to securely authenticate an identity. Remote provisioning is the future trust architecture to help bring hardware stored and managed digital identities and security features to edge devices within IoT applications, using hardware as that identity trust anchor.