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eUICC SIMs: A New IoT Opportunity for Equipment Manufacturers

by Robin Duke-Woolley, Founder and CEO, Beecham Research Ltd

In the age of the Internet of Things (IoT), original equipment manufacturers (OEMs) face a critical threat. Equipment and other products not connected to the internet can’t compete with connected products that can generate data for new services, be easily updated with new features or be remotely monitored for performance. The value of an unconnected product is the product itself, while a connected product can support services that increases its value over its life.

As a result, connected products have a significant competitive advantage in the market. To thrive in today’s digital economy, OEMs across all sectors, such as consumer, energy, healthcare, industrial, retail, security/public safety and transport, need to develop service strategies based on connecting their products to the internet.

One key technology that can help OEMs more easily integrate connectivity into their products is the embedded Universal Integrated Circuit Card (eUICC).

What is an eUICC SIM?

eUICC is a type of Subscriber Identity Module (SIM) card, used to connect products and other devices to cellular networks. 

eUICCs SIMs are different than traditional SIM cards. Traditional SIM cards are owned by network operators and can only use this operator’s network. If the device’s owner want to use a different network, they have to take out their SIM card and put in a different operator’s SIM card. 

Unlike traditional SIM cards, eUICC SIMs can be owned by the user of a device and assigned to different network operators remotely. This enables the owner of a device to switch operators without replacing the device’s SIM card with one from the new operator.

eUICCs, in conjunction with device-to-cloud embedded SIM (eSIM) solutions that allow owners of devices to remotely manage eUICC network connectivity, make it easier for OEMs to design IoT connectivity into products, while also enhancing the value of this connectivity over the life of the products. 

How Do eUICCs Make IoT Applications Easier and Less Expensive to Deploy? 

Traditional SIM cards have hindered the development and growth of IoT applications that integrate connectivity into equipment and other products.
 
For example, when mass producing a connected lamppost with a SIM to sell into different regions, the manufacturer may not be able to anticipate which mobile operator should be associated with the lampposts. This creates additional costs, as the manufacturer might need to install a SIM after the equipment is ordered or delivered. In addition, if there is a need to change the mobile operator during the life of the application, the SIM card would have to be changed. This introduces additional challenges, including an expensive site visit for each lamppost. Once the technician is at the site to change the equipment’s SIM card, there can be other challenges as well, depending on how the IoT device has been designed into the equipment. For instance, a SIM card located at a high point on the lamppost in order to prevent tampering would mean each site visit would require special equipment and take a long time to complete.
 
To address these and other traditional SIM card challenges, companies like Sierra Wireless developed the eUICC, making it possible to remotely assign or change the network operator connected to a device’s SIM. An eUICC can be designed as a traditional card or as a small electronic chip inserted onto the circuit board of a device during the manufacturing process (the MFF2 form factor). The MFF2 form factor eliminates the need for a SIM card holder, reducing the volume of space required for the SIM. MFF2 form factor eUICCs are normally embedded in the device as eSIMS and cannot be removed. eUICCs designed like a standard, non-embedded SIM card can also replace traditional SIM cards in existing devices to introduce a remote provisioning capability.

What is an eSIM?

eSIMs are SIM cards that are embedded in an device during the device’s manufacturing process. Since they are embedded into the device and can’t be removed or replaced with another SIM card, eSIMs cards often use eUICCs or technologies that allow them to be assigned to other operators’ networks. eSIMs also improve device security, since they can be more easily concealed and are difficult to remove, helping prevent SIM tampering or theft.

eSIMs are generally integrated into devices as part of a larger eSIM solution that allows the device owner to assign the eSIM to other networks. Many eSIM solutions also include other features, including management platforms that allow device owners to monitor service quality, or connectivity services that allow a device to dynamically connect to another network if the signal for their current network is not available or weak. 

As my firm details in its recent report, Business-Critical IoT Connectivity Solutions: Key Management Challenges, these and other eSIM capabilities are leading OEMs and other companies to increasingly use eSIMs instead of traditional SIMs in their devices and other products. For example, in a survey my firm conducted for this report, 78% of the IoT users and product manufacturers surveyed said they were either using eSIMs, or expected to use eSIMs in the future.

eUICC vs eSIM

As mentioned above, an eUICC is not the same thing as an eSIM. An eUICC is simply a SIM card that is capable of being remotely provisioned and comes in a variety of form factors. An eSIM is a SIM that has been embedded in a device, and is sold as part of a larger eSIM solution that also includes the software and subscription management system needed to remotely provision the eSIM and manage its connectivity over time. Such eSIM solutions have been commercially available for a few years, but rather than use eUICC technologies, they have mostly been expensive, proprietary solutions. However, the eUICC standard is not proprietary. In addition, the GSMA (GSM Association), which represents the majority of mobile operators worldwide, is busy developing an eSIM specification for remote SIM provisioning that would accelerate the adoption of eUICCs.

With eUICCs, OEMs integrating IoT applications into their products can insert an eUICC eSIM card into a circuit board during the manufacturing process as if it were any other component. This eUICC eSIM solution can then be used to provision the eSIM with an appropriate network operator profile at the most convenient time and place in the product’s supply chain. 

This means OEMs can order just one SIM SKU, streamlining production processes. A single SIM SKU also reduces costs by eliminating the time, cost and complexity associated with pre-ordering different SIM cards with different network operator profiles depending on where the devices may be shipped. It also changes the ownership of the SIM. Traditional SIM cards have been the property of an individual network operator, which supplies them to a manufacturer. With eUICC eSIMs, OEMs or service providers own the SIM card and can decide – and eventually change – which network operator is most appropriate for their product’s IoT application.

Top eUICC Use Cases

To date, Sierra Wireless has identified three main use cases for eUICCs:

  • Insurance – Smart meters and home alarm systems are not usually in locations that are easy to access, which increases the difficulty of trying to negotiate cost reductions with a service provider, since the cost of switching providers can be high. With eUICCs, the network operator can be changed when the contract comes up for renewal, considerably strengthening the bargaining position of a customer.
  • Single SKU – The eUICC eSIM is embedded in a product during the manufacturing process, and the product can then be shipped anywhere in the world. When it is switched on, the eUICC eSIM automatically connects over-the-air to a remote SIM provisioning system, which downloads the correct network operator profile. Auto manufacturers have pioneered this use case, which applies to both new cars and cars entering the secondhand market. When the car is relocated, even to a different country, the eUICC eSIM is capable of being re-provisioned as needed.
  • High availability – For mobile applications requiring optimal connectivity at all times, such as for safety and security solutions, eUICCs enable dynamic switching among a large number of available networks to ensure coverage – including across borders and network null points – at the lowest cost.

We Are Just Getting Started

Apart from the auto sector, Beecham Research has identified over 100 application groups where eUICCs can drive significant IoT market growth over the next five years. This growth will also be supported by the introduction of Low-Power Wide-Area (LPWA) cellular technologies, such as LTE-M and NB-IoT, which are very low cost and intended for deployment in very large numbers.

In the future, it is increasingly likely that hardware-based eUICCs will evolve into Soft SIMs, a collection of software applications and data that perform the functionality of a SIM card but do not reside in any kind of secured data storage card hardware. Instead, they would be stored in the memory and processor of the communications device itself, such as a cellular module. The exact direction of further development and growth of the eUICC market will depend on the acceptance by mobile operators that this is the right approach to cellular use in the IoT market.

For a more in-depth discussion of eUICC, read the white paper, eUICC: Accelerating the IoT Opportunity for OEMs. And Start with Sierra to learn more about how Sierra Wireless’ comprehensive device-to-cloud platform for building, deploying and managing IoT applications, including hardware, software and services, empowers OEMs to build IoT applications that transform their businesses in ways that enable them to thrive in the connected economy.

This article has been updated and was first published on the 15th of November, 2018.