After reading the title of this article, it might lead the reader to assume that this is another sad story about missed opportunities. However, nothing could be further from the truth. The misunderstood and under-utilized standard SIM that been in your mobile phone for over two decades is a powerful piece of standardized technology that has historically been pigeonholed to perform one major function – device authentication on the mobile network. This was mainly due to Mobile Network Operators (MNOs) that owned and controlled the SIMs viewing them as “revenue assurance” tools, thus significantly reducing the risk of fraudulent use of the device’s subscription. SIMs are the perfect vehicle for such a mission as they are “secure elements” under the control of the Global Platform. The Global Platform defines the standards for secure digital services and devices such as SIMs and credit cards. At their simplest level, SIMs are small, standardized processors that execute secure authentication algorithms as part of network-based identity management and assurance systems.
With the advent of connected devices and the Internet of Things (IoT), the SIM standard has evolved to include a new generation known as eSIMs. eSIMs do everything that SIMs do but in a hardware component form factor that is integrated directly on the printed circuit board of the device. A significant difference of the eSIM is that it can be preloaded with multiple subscriptions from different MNOs. This enables OEMs to manufacture one device SKU, which can later utilize the preferred MNO subscription, based on where the device is deployed. This evolution in technology has led to a change of custody in the connected device value chain because of its ability to contain multiple MNO subscriptions. The owner of the eSIM is the OEM or enterprise controlling the device as they procure the eSIM and ultimately decide which MNO subscriptions to preload.
This seemingly innocuous shift in the control of the SIM is creating a massive opportunity for unleashing innovation in the IoT space. This is because most IoT devices are bespoke built without a dominant operating system such as iOS or Android, which would enable the development and deployment of applications thus impeding efficient scalability over a mass number of units. The eSIM, being freed from its previous locked down role of MNO revenue assurance tool, has transformed the SIM into what it has always been; a tiny processor running Java Card with standardized form factors and physical and logical interfaces. This embedded processor is the perfect vehicle to mass deploy tools and applications across the enormous universe of IoT devices in all vertical segments. Moving forward, the owner of the device will ultimately decide what value the SIM will provide.
The evolution of SIM technology is not only creating a new value chain owner and expanding the utility of SIMs in IoT devices, but it is also impacting the alignment of the SIM industry. Under the ownership of the MNO, the SIM was the very definition of a commodity, performing one standardized function. This made it difficult for the SIM suppliers to price and sell on a value-added basis. In response, they offered SIM management platforms and value-added applets that only worked on their SIMs, thus locking them in as suppliers to their MNO customers. These integrated offerings by a handful of large, established players, impeded the entrance of nimble, innovative startups into this space. This situation is currently changing because the new OEM and enterprise eSIM owners don’t view them as commodities. They perceive them as powerful, standardized tools for security and device identity; managing connectivity quality of experience; efficient network utilization; a side-channel embedded debugging tool; and ultimately the processor hosting and executing the IoT application itself. These new owners are open to innovation and prefer not to be locked into an integrated solution, wanting the ability to select the optimal solution elements that meet their unique performance and price requirements. They want flexibility; the ability to change a solution element provider at any time, for any reason. The strictly enforced standards for SIMs and their related services has always positioned the industry well to meet these needs. However, the traditional use of SIMs for authentication by MNOs did not require or allow SIMs to be fully utilized for the power, flexibility, and standardization that they can provide.
We are just entering the early stages of SIM innovation, driven by the new standards and capabilities of the eSIM. Smaller, innovative companies are launching compelling solutions. These companies are not just providing innovation in technology but the business model as well. They are being responsive to the various needs of the many vertical segments that IoT serves instead of delivering the traditional monolithic model offered to MNOs. This shift is not coming easy, as the large integrated SIM companies are not accustomed to and are somewhat reluctant to operating within an ecosystem. However, ultimately the end customers, the “demand-side” if you will, will begin to dictate the models under which they will do business. If the number one in the SIM industry won’t comply, the OEM or enterprise will move to the second, third, or even fourth industry player. The shift is beginning, it will take time, but ultimately the transition will happen as the SIM itself is the very definition of a commodity with a scant difference from whom it is purchased.
About Able Device
Able Device provides standards-based enabling technology that simplifies and accelerates the development and deployment of IoT applications on mobile networks. Our innovative technology, SIMbae™, enables standard Subscriber Identity Modules (SIMs or embedded eSIMs), which are inserted into all mobile devices with Mobile Network Operator (MNO) subscriptions, to act as stand-alone processors that run device management tools and / or applications in IoT devices. By utilizing the processing power of SIMs / eSIMs, we can offer a standards-based, yet unique way to shift security, intelligence, and Quality of Experience (QoE) to the extreme edge of a mobile IoT solution.