eSIM SGP.32 Brings Connectivity to a Broader Range of IoT Applications
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Market Outlook for eSIM SGP.32
The Embedded Subscriber Identity Module (eSIM) landscape is evolving as the SGP.32 specification prepares to replace SGP.02. In the midterm, both specifications will see adoption growth. Initially, SGP.32 transactions will be propelled by new Internet of Things (IoT) applications, such as asset tracking and smart metering. This is especially true in the water and gas sectors.
A significant shift is anticipated in the automotive sector, with SGP.32 profile downloads expected to surpass those of SGP.02 by 2028. The adoption curve for SGP.32 is forecast to be rapid. Some enterprises are already launching pre-certified solutions. This tells us that the market is ready and that early SGP.32 use cases have effectively addressed real pain points.
Although still in development, SGP.32 is finally approaching commercial availability. The first Proof of Concept (PoC) devices are expected by late 2025, and certified devices are projected for 2026.
ABI Research forecasts that SGP.32 profile downloads will reach 2.89 million in 2025 and soar to 194 million by 2029 as standardization efforts conclude and mass uptake occurs. Although SGP.32 deployments will dominate in the initial years, a significant ramp-up is expected from 2027 onward. Users will increasingly transition from SGP.02 to SGP.32 to ensure they remain aligned with the latest specifications and future-proof IoT connectivity operations.
“The eSIM market ecosystem is fairly expansive, growing and maturing. Broadly speaking, eSIM ecosystem activity can be split into several different buckets, with many vendors active in multiple areas as they look to draw out as much value as possible from the business model shift to digital. Of those ecosystem players, all are primed for the SGP.32 opportunity.” – Phil Sealy, Research Director at ABI Research
Communicate the Benefits of SGP.32 to OEMs and Service Providers
Educating device Original Equipment Manufacturers (OEMs) and IoT connectivity service providers on the advantages of SGP.32 is crucial for its successful adoption. At its core, the SGP.32 specification merges the best features of both SGP.22 and SGP.02, while being tailored for various IoT applications—not just automotive.
Unlike its predecessors, SGP.32 is more focused on the needs of end users and enterprises, rather than solely on telco providers. Here are some of the key benefits:
- Streamlined Integration: SGP.32 reduces the complex and time-consuming processes of onboarding multiple operators through remote profile downloads from existing SM-DP+ infrastructure.
- Simplified Communication: It lowers the barriers between Subscription Manager Secure Routing (SMSR) and Subscription Manager Data Preparation (SMDP). As a result, any IoT/Machine-to-Machine (M2M) device can communicate without prior integration.
- Instant Connectivity: Users can choose bootstrap or pre-assigned networks to immediately access IoT connectivity services.
- Automated Device Activation: The specification minimizes the need for manual activation of large device fleets, enhancing efficiency through automation and bulk Subscriber Identity Module (SIM) management.
- Flexibility for Mobile Devices: SGP.32 supports IoT devices that move across borders, allowing for a more diverse operator partnership without the constraints of geographic provisioning.
- No Physical SIM Replacement: Users can switch operators without replacing physical SIMs. This fosters a more competitive environment and reduces costs.
- Broader Compatibility: Unlike SGP.02, which is limited to Short Message Service (SMS) or HTTPS for profile downloads, SGP.32 is designed for Low-Power Wide Area Networks (LPWANs). In turn, users unlock broader cellular IoT markets.
- Facilitating Global Expansion: Enterprises can achieve global IoT connectivity compliance through Remote SIM Provisioning (RSP).
- Future-Proofing Connectivity: Users can move away from operator lock-ins and negotiate more flexible connectivity contracts.
Related Insight: eSIM SGP.32 Specification Was the Hot Ticket at MWC 2024
How Does the SGP.32 Specification Overcome Barriers to IoT Adoption?
The SGP.32 specification aims to eliminate barriers previously hindering eSIM adoption in IoT applications. The SGP.02 standard primarily centers on automotive use cases, making it unsuitable for many IoT devices. With SGP.32, several improvements are made:
- Reduced Development Work: The IoT Profile Assistant (IPA) feature can be integrated into devices or Embedded Universal Integrated Circuit Cards (eUICCs), facilitating lighter profiles for constrained devices.
- Support for Low-Capability Devices: SGP.32 accommodates devices that lack SMS functionality and embraces a broader range of Low-Power Wide Area (LPWA) cellular types.
- Utilization of Existing Infrastructure: The specification is compatible with the existing SM-DP+ infrastructure, easing the transition for many organizations.
As of now, SGP.32 is partially ratified, with full technical and certification aspects expected to be completed by the end of 2024. Chipset certifications will follow, leading to the introduction of the first SGP.32 chipsets in 2025. Supported devices are expected to enter the market in late 2025 or early 2026. Although pre-certified solutions are already available, they are a stepping stone until SGP.32-compliant solutions are commercially launched.
Revolutionizing IoT Connectivity Relationships
The introduction of SGP.32 will transform IoT connectivity dynamics. Historically, the rigidity of SIM technology has locked service providers into long-term contracts, often spanning decades. SGP.32 fosters competition by enabling service providers to negotiate shorter contracts or decouple agreements, utilizing Mobile Virtual Network Operator (MVNO) connectivity and existing roaming arrangements.
Focus on Connectivity Services: Mobile Network Operators (MNOs) and MVNOs must enhance their IoT connectivity offerings. Service quality, reliability, latency, and pricing will define connectivity churn, not the SGP.32 specification itself.
Although SGP.32 is not yet fully ratified, SGP.02 will continue to be deployed in the midterm. Both specifications will coexist temporarily, largely due to substantial investments in SGP.02 deployments. While SGP.02 will eventually phase out, new IoT connectivity opportunities will emerge, especially as existing SGP.02 users begin to upgrade to SGP.32 for long-term viability.
It's important to note that there is no defined migration path from SGP.02 to SGP.32. The new specification will necessitate fresh device certifications, making it unlikely that a migration route can be established. For this reason, ecosystem players should continue to support SGP.02 in the short to medium term, as the transition to SGP.32 may take time.
Key Companies
- Acer
- Apple
- ETSI
- GSMA
- Hewlett Packard (HP)
- Huawei
- IDEMIA
- Lenovo
- MediaTek
- Microsoft
- Mobile Network Group
- Motorola
- Nokia
- OnePlus
- Qualcomm
- Samsung
- Sony Corporation
- STMicroelectronics
- Two Technologies
- vivo
- Xiaomi
Conclusion
As the eSIM landscape evolves, the SGP.32 specification represents a significant step forward for IoT connectivity. By merging the best features of previous specifications and focusing on user-centric benefits, SGP.32 is poised to break down barriers and open up new opportunities in the IoT market. Stakeholders must stay informed about these developments to leverage the potential of SGP.32 and ensure successful transitions in their connectivity operations.
For more in-depth insights into the SGP.32 timeline and its implications for the industry, explore ABI Research's Understanding the eSIM SGP.32 Timeline and Opportunity report.
Related Research
Report | 3Q 2024 | AN-5180
