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An embedded SIM is a SIM card that cannot be removed from a device. Traditional SIM cards are made so that they can easily be swapped out of a phone, so that core service information can get ported from one physical device to another. With an embedded SIM, the chips are made to allow for information switching, so that the actual physical chip would not get removed from the device.
Part of the advantage of an embedded SIM is that customers would not need to order replacement SIM cards and physically integrate them into their phones. Instead, on-demand models would allow for quick changes in real time. The idea is that manufacturers would use the same SIM card across the industry.
Some of the downsides of embedded SIM cards include less customer freedom to adjust the device from one provider to another. In a sense, the tools would be placed in the service provider's hands. However, the convenience of an embedded SIM makes it likely to become commonplace within the next few years.