“eSIM” names a capability more than a form factor: a SIM that supports remote SIM provisioning, the GSMA standard for downloading, enabling and deleting operator profiles over the air. The chip is usually soldered (the MFF2 package), which is where the “embedded” comes from, but remote provisioning also works on removable cards, and a soldered SIM without it is not an eSIM.
For cellular IoT the benefit is freedom after deployment. A tracker manufactured in one country can ship worldwide and pick up a local profile when it is switched on; a utility can change carriers across a meter fleet without touching a single device. Separate flavors exist for consumer devices and for centrally managed machine-to-machine devices. The cost is a more complex supply chain and dependence on the platforms that broker profile downloads.
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