July 20, 2026

What Is an Embedded SIM? A Complete Guide for Businesses

Physical SIM cards are giving way to digitally provisioned connectivity. Discover why embedded eSIMs are becoming essential across smartphones, IoT, and enterprise.

esims

zendit API

Embedded Subscriber Identity Module (eSIM) technology is transforming how mobile connectivity is provisioned, managed, and scaled.

By eliminating the need for physical SIM cards and enabling remote profile management, it allows businesses to activate devices digitally, streamline operations, and support connected services across multiple markets.

As adoption accelerates across consumer electronics, industrial IoT, automotive, and enterprise devices, understanding embedded eSIMs is becoming essential for organizations planning their connectivity strategy.

However, not every business understands how eSIMs work or the benefits that justify switching to them.

In this article, we will bridge the knowledge gap by exploring what an embedded eSIM is, how it works, its advantages, and the industries driving its rapid adoption.

We’ll cover:

Embedded SIM definition: An introduction to the mobile technology
How eSIM works: Understanding the technology
eSIM adoption: Where and how they are being adopted
Benefits of eSIM: Why businesses are embracing the technology

Do you want to open a new revenue stream by reselling eSIM data plans? Book a demo with zendit to see how you can easily integrate our white-label product with your app or website.

1. Embedded SIM definition: An introduction to the mobile technology

An embedded SIM (eSIM) is a digital SIM that is built directly into a device (phones, tablets, smartwatches, and IoT devices) that allows users to connect to mobile networks without requiring a physical SIM card.

It is usually a small Embedded Universal Integrated Circuit Card (eUICC) chip soldered into the relevant device.

Like a physical SIM, it stores carrier credentials like IMSI, ICCID, and authentication keys, but it is digitally provisioned. An eSIM is also known in some technical corners as a Machine-to-Machine Form Factor 2 (MFF2) SIM.

Evolution of SIM Cards

Source: PCMag

A better way to grasp this technology is to compare it with a physical SIM (whether IoT SIM cards, M2M SIM cards, or popular SIM Cards on mobile devices).

Below are the most important differences, according to Vodafone:

eSIM vs Physical SIM

Source: Vodafone

A further explanation of these differences will bring more clarity:

Getting started: Users don’t need to purchase an eSIM the way they buy a physical SIM. As said above, it is a chip already embedded into the device.

Activation: In many places, users need to register and activate a physical SIM at the carrier’s office. After this, they need to insert the card into their devices to access the carrier’s mobile network.

On the other hand, eSIMs can be easily activated on the relevant device, usually through a QR code.

Changing networks: Unlike a physical SIM that is provided by and attached to a carrier, an eSIM is carrier-agnostic. Said differently, users can create different eSIM profiles with diverse carriers.

While only a single profile can be active at a given point, this digital provisioning makes it easy to switch between different carriers with just a few button clicks rather than a SIM change.

Switching devices: When there is a device change, users need to move the physical card to the new one. With eSIM, the same profile can be activated on a new device through a QR code.

Users: eSIM is being adopted by digitally-savvy users, while physical SIM is preferred by those with older devices or who are comfortable with the older technology. However, many devices support dual SIM with one physical SIM and one eSIM.

2. How eSIM works: Understanding the technology

Another way to understand the eSIM technology is to highlight the practical steps users take to get started with it.

Below is an overview:

Verification of the device’s compatibility: For mobile phone users, one quick way to do this is to check an updated list of eSIM-compatible devices. They can also check their mobile network settings to see if there is an eSIM option.

Another option is to dial this code: *#06#. If the device is eSIM compatible, there will be an EID number in the response, according to Wise, the international money transfer platform.

Purchasing an eSIM plan from a carrier: Apple has a list of mobile network carriers that provide eSIM plans in different countries. Many wholesalers and retailers also sell these plans on behalf of these carriers.

Activating an eSIM plan: After purchasing a plan, the user needs to activate it on the device by connecting to a WiFi network.

The carrier will typically provide an activation link (that often leads them to download an app) or a QR code for the digital activation of the eSIM. After scanning the code or using the activation link, they can securely download the eSIM profile onto the device.

After this, the eSIM is automatically linked to the carrier’s cellular network.

Downloading and switching between multiple carrier profiles: Users can perform the activation process for multiple carriers. This leads to multiple carrier profiles on the same eUICC chip. They can switch between these SIM profiles in just a few taps.

Remote provisioning and eSIM management: An eSIM uses remote SIM provisioning (RSP) technology, standardized by the GSM Association (GSMA). This allows them to install, update, and delete an eSIM profile on a device over-the-air (OTA), without requiring a physical SIM.

Once a carrier generates a profile (which contains network credentials usually found on a physical SIM card), they encrypt it and send it to the device the user is activating. The device will verify the carrier’s identity and then store the profile in the eUICC chip, thus activating the network connection.

The technology also allows carriers to remotely update, suspend, and delete eSIM profiles on a device.

“The real USP of eSIM isn’t ‘no plastic card’; it’s remote provisioning,” according to Warren Davies, the founder of BeyondCRM, a CRM consultancy business. “For businesses, that means less logistics, easier device swaps, multiple carrier profiles, and cleaner management of phones, tablets, vehicles, kiosks, and IoT devices.”

Connection to a cellular network: For smartphones and tablets, eSIMs usually connect to 3G, 4G, or 5G networks, depending on the location.

With IoT devices, eSIMs also support radio technologies like LTE-M, NB-IoT, and LoRaWAN.

Below is a visual representation of how eSIM works, provided by Furqan Jameel, an Area Product Owner at Nokia, that summarizes what we have been talking about.

Source: Furqan Jameel

3. eSIM adoption: Where and how they are being adopted

In 2025, about 605 million new eSIMs were shipped globally, representing an 18% increase from the previous year, according to data from Trusted Connectivity Alliance, an industry association of the eSIM hardware market.

The bulk of the growth came from consumer devices, as usage among them increased by 43%, supported by the availability of low- and mid-range smartphones that support eSIMs.

Adoption is also expected to increase among IoT devices with the implementation of GSMA’s eSIM IoT Specification (SGP.32), which will simplify remote provisioning and management of IoT devices. This expectation is already being fulfilled as the number of eSIM Subscription Manager (SM) supporting profile downloads based on this specification has increased.

In terms of geographic distribution, North America continues to lead the pack at 39.39% market share, according to Mordor Intelligence, a market research company. However, all regions have experienced significant growth, with Asia Pacific being the fastest-growing region (expected CAGR of 27.36% through 2031).

We can consider eSIM adoption in terms of devices and industry or verticals.

“eSIM finds applications in various devices and industries, including connected cars, laptops, Machine-to-Machine (M2M) communication, smartphones, tablets, wearables, and other Internet of Things (IoT) devices,” according to Research and Markets, a market research company. “These applications span across different verticals such as automotive, consumer electronics, energy and utilities, manufacturing, retail, transportation, and logistics.”

Of these devices, smartphones dominate with a 60.29% market share, according to Mordor Intelligence. In terms of growth, wearables lead the pack, with an expected 26.76% CAGR between 2026 and 2031.

“Smartphones and wearables led the earliest adoption because manufacturers and carriers could deliver remote provisioning and multi-carrier profiles to end users,” according to Ritwick Dey, co-founder of Panto AI, a platform automating QA testing for mobile apps. “Automotive OEMs are next—modern vehicles use embedded eSIMs for telematics, over‑the‑air updates, emergency services, and feature subscriptions. Industrial IoT (asset trackers, gateways, logistics) is rapidly adopting eSIM because it eliminates site visits for SIM swaps and supports global deployments.”

In terms of industry, consumer electronics take the bulk of the market share (44.84%), though the strongest growth is in automotive and transportation.

One area where eSIM has made a mark is in the travel industry. Travel eSIM was valued at $3.3 billion in 2025 and is projected to be a $478.8 billion industry by 2035, at a CAGR of 64.5%, according to Globe Market Research.

As more consumers and businesses become aware of the benefits of eSIM, adoption will continue to increase.

“I expect eSIM to become standard within a few years,” said Alec Loeb, VP of Growth Marketing at EcoATM, a smartphone recycling company. “That points to a bigger shift in tech toward less material waste and hardware built to last longer before recycling.”

And as adoption increases, eSIMs will evolve to provide even more value.

“Over the next few years, I expect eSIM to become more tightly managed through device-management platforms and business systems, with iSIM pushing the same idea further by building SIM capability directly into device silicon,” said Davies.

4. Benefits of eSIM: Why businesses are embracing the technology

The advantages of eSIM to end users are well known. They are very convenient, since there is no reason to insert or swap SIM cards. The ease of switching between carriers can support cost and service efficiency as users can shop around for the best service provider.

Also, eSIM is travel-friendly, as travelers can access local data plans without visiting a physical store to purchase a new SIM card. The fact that they can’t be physically removed or cloned also adds an extra layer of security. We can also mention the environmental benefit that comes from reduced demand for physical SIM cards.

However, eSIM also has many benefits for businesses:

Design and execute better reward programs: Human resource personnel are always in search of the perfect reward for specific or general employee reward programs.

Given that the average person spends 6 hours and 38 minutes online daily, according to Intelpoint, a news and analytics platform, eSIM data plans can become a very valuable gift that HR departments can add to their reward options.

Also, eSIM data plans can be appropriate customer rewards, since customers are as likely as employees to spend a good portion of their time online.

Global connectivity: When employees are traveling for business purposes, they can easily stay connected by switching to a carrier that is active in their new locations. This smooth transition from carrier to carrier keeps the communication line open at all times.

This is especially important for organizations with a global or remote workplace. Everyone can stay connected, irrespective of their current location. Also, remote workers in locations where network quality fluctuates can easily switch to another carrier.

In addition, businesses can deploy IoT devices globally without worrying about SIM card compatibility.

Cost optimization: Employees who have to connect to their carriers when abroad face high roaming costs. These costs arise because users rely on infrastructure that their home network does not own, and they can easily add up.

eSIM provides a cost-effective alternative.

“Rising roaming costs and heavier data usage are pushing travelers and companies toward unlimited eSIM plans,” according to Business Insider Africa, a business magazine.

Flexibility and scalability: The ease of switching between multiple carriers makes eSIMs flexible for organizations with a global workforce. Also, businesses can scale by adopting eSIM for industrial devices and IoT devices like smart meters, connected vehicles, and industrial sensors.

Open new revenue streams: Many businesses are now partnering with mobile network operators (MNOs) or mobile virtual network operators (MVNOs) to sell digital eSIM data plans to consumers, IoT clients, and, especially, travelers.

Some businesses do this as a part of a white-label platform, like zendit, or through direct partnerships with carriers.

If you are an organization seeking to create robust employee reward programs with eSIM, support a global workforce, or resell eSIM data plans as a new revenue stream, zendit is a white-label platform you should consider.

We have a global catalog of 600+ operators in 190 countries, which means you can find the appropriate carrier irrespective of where your employees and customers reside or travel to.

You can easily integrate our simple API into your website or app in minutes and gain instant access to millions of eSIM data plans across hundreds of operators.

As a true white-label product, we allow you to design available eSIM data plans with your brand identities. Your employees and customers will receive the data plans as coming from you, which is good for brand awareness and loyalty.

Also, we provide flexible data plans, including unlimited plans and a wide variety of limited plans. All these data plans can be activated with a simple QR code.

Are you ready to create a new revenue stream by reselling eSIM or purchase them in bulk as gifts for your employees and customers? Sign up now for an account with zendit for access to a flexible and scalable white-label solution.

Takeaways

Embedded SIMs are proving to be a convenient alternative to physical SIM cards. They enable remote provisioning, making it easier to activate, switch, and manage mobile network profiles digitally.
eSIM adoption is accelerating across regions, industries, and devices, with North America, consumer electronics, and smartphones leading the pack, respectively.
For businesses, eSIMs improve scalability, reduce roaming costs, support global workforces, and simplify IoT deployments.
eSIMs create new revenue opportunities as companies can resell digital data plans by integrating white-label eSIM services into their existing products.

Frequently Answered Questions

1. Can an embedded eSIM work without an internet connection?

An embedded eSIM stores the mobile profile on the device, but downloading or activating a new profile typically requires an internet connection, usually through Wi-Fi. Once activated, the eSIM functions like a traditional SIM card and no longer needs Wi-Fi to connect to the mobile network.

2. Are embedded eSIMs compatible with every mobile network?

Not necessarily. While eSIM support continues to expand globally, carriers must enable eSIM provisioning on their networks before customers can use the technology. Businesses deploying eSIM-enabled devices should verify carrier compatibility in their target markets before rollout.

3. Is an embedded eSIM more future-proof than a physical SIM?

In many cases, yes. Because carrier profiles can be downloaded and updated remotely, devices with embedded eSIMs can adapt to changing connectivity requirements without requiring new hardware. This flexibility makes them particularly well-suited for long-life devices such as industrial IoT equipment, connected vehicles, and enterprise deployments.