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IoT Evolution Expo Interview: Gemalto Drops Gems on eSim Technology

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Juniper Research has recognized Gemalto as an IoT technology leader for the industrial and consumer IoT markets, and the company is exhibiting at the IoT Evolution Expo this week to show off some of those award-winning goodies. Juniper predicted strong growth for eSIMs and remote subscription management platforms, a sector where Gemalto has a strong history of success. A new generation of connected devices will require a new kind of subscriber identity module (SIM). IoT Evolution’s Carl Ford had a chance to chat with Juan Carlos Lazcano, VP, M2M and IoT, Gemalto North America, about the significance of eSim technology for the IoT.  

IoT Evolution: Why do we need eSIMs?

JC Lazcano: Historically, the job of the SIM was to securely store the subscriber’s identity when the device connected to the network. Security was paramount, so operators made SIMs hard to access physically and very hard to hack. This worked in an era of mobile phones and voice, but it’s not so good for cars, meters and other machine-to-machine (M2M) devices. It’s equally unsuited to new connected consumer products like watches, wearables and toys.

IoTE: What is the solution?

JCL: In October 2013, the leading operator trade organization, the GSMA, revealed it was developing a new kind of SIM that could be soldered in place and then programmed to connect remotely to a chosen carrier network. It called this the embedded SIM, or eSIM for short.

IoTE: What does it mean for mobile telecoms operators?

JCL: Ultimately, it frees up operators to focus more attention on improving services and expanding networks.  A programmable SIM can potentially have an impact on churn: by making it easier for users to sign up with a network, you also make it easier to switch away from one. 

But the market opportunity is huge! The 2016 Ericsson Mobility Report projected that, of the 28 billion devices that will be connected by 2021, almost 16 billion will be IoT devices. Operators want to ensure they are the ones connecting them.

Perhaps the greatest area of potential for eSIMs is in consumer devices such as cameras and smart watches. The IoT market for consumer electronics devices, which didn’t even exist in 2014, is predicted to be worth €160-190 billion a year (approximately US$178-211 billion a year) by 2020, according to analysis by EY; and Beecham Research says that automotive and consumer electronics will comprise two thirds of all connections by 2020.

IoTE: What does this mean for developers and other IoT ecosystem partners?

JCL: It simplifies and speeds design and deployment as well as the manufacturing and distribution value chain.  M2M and IoT solutions are designed for longevity of 10+ years.  As such, carrier specific SIM cards were traditionally embedded in devices during manufacturing to ensure rugged durability over the long haul.  With eSIMs, developers no longer need to design different product variants for each global operator; nor do they need to produce and warehouse a variety of device carrier specific SKUs.  One device design can be provisioned for any global operator.

IoTE: What other benefits do eSIMs bring?

JCL: Jean-Christophe Tisseuil, Head of SIM Technology at the GSMA, says: “The space saved by embedding a SIM can be as much as 90% on a physical card. This helps OEMs free up space for other uses, such as batteries. Also, embedded M2M eSIMs are far better at withstanding vibrations and heat, so they can be soldered inside engines and still function.”

This is why analysts believe carmakers will be among the first to adopt eSIMs. General Motors, Jaguar Land Rover, Renault Nissan, Scania and Volvo have already publicly committed to the standard.

IoTE: What needs to happen in order for eSIMs to be effective?

JCL: An eSIM is of little use if it cannot easily switch between any available network. That’s why, in response to signs of fragmentation in the market, the GSMA brought together 40 players from across the ecosystem to agree a standard. Security was a top priority. An eSIM is not software: it is a physical product, so it is extremely hard to access. However, sending profiles over the air could, in theory, raise the prospect of hacking. To combat this, the partners worked together to guarantee the secure encryption and transportation of operator credentials.

IoTE: What issues need to be addressed to ensure success?

JCL: One glaring shortfall is in the user interface. For example, the first consumer device containing an eSIM, the Samsung Gear 2 watch, requires users to go into their phone settings and select “provision an eSIM profile” to connect the watch. Taking that a step further, how do you connect a device with no screen?  Everyone is aware of the issues, especially at this stage when devices are generally connected through a phone. But this will change when devices are able to connect independently.




Edited by Ken Briodagh

Partner, Crossfire Media

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