Friday, March 29, 2024

eSIM shipments to hit 400 million by 2022 as Apple?s new smartphones accelerate market

The eSIM smartphone market is set to reach 420 million units annually by 2022, due to Apple?s decision to incorporate the technology into its iPhone XR, XS and XS Max devices, which will accelerate eSIM market growth, according to analyst firm ABI Research.

Photo credit: macworld.com.uk

eSIM stands for ?embedded SIM?, a standardized SIM chip open to multiple mobile operators globally. Meaning, if a user has an eSIM, he or she doesn’t have to replace one SIM card with another when switching carrier.

September 2018 can be considered a significant milestone in the development and deployment of the eSIM, moving the eSIM smartphone market bar from one which was solely occupied by Google and its Pixel 2 device, shipping a few million a year toward, potentially, the hundreds of millions.

Phil Sealy, principal analyst at ABI Research, commented that ?It was always a case of ?when?, not ?if?, Apple would extend support of eSIM beyond its smartwatches and select a range of tablets into its smartphone portfolio. With its announcement of the XR, XS and XS Max range of iPhones, that time has arrived. All three phones include dual-SIM support via a traditional removable SIM card slot, alongside an eSIM. This rollout, however, will exclude the China market, where dual SIM functionality will be delivered via two traditional removable SIM card slots.?

Arguably, Apple has now made eSIM integration into smartphones fair game, and all eyes will be looking toward the next set of OEMs who will offer dual-SIM models in their next-generation smartphones.

?Samsung is a clear contender for the next Original Equipment Manufacturer (OEM) likely to launch an eSIM handset. However, Samsung will likely adopt a tiered approach, integrating the eSIM into its S and Note range first, then expand into its A and C ranges later. Huawei is another, but we should not dismiss other OEMs, including LG and Xiaomi, who both have a range of high-end smartphones, or even other more localized vendors, including Oppo, who are looking to expand beyond China,? stated Sealy.

The eSIM form-factor is a transformative technology, which will undoubtedly impact the entire SIM value chain, including business models, sales channels, and processes across the smart card, secure IC, Mobile Network Operator (MNO) and OEM vendor landscape.

Sealy added that ?this will mark the beginning of a significant required change in the SIM card hardware value chain, where the current leading vendors, including Gemalto, IDEMIA, G&D, and Valid will begin to see revenue shift from their respective traditional hardware supply businesses toward supporting platforms and services, including secure OTA management, subscription, and lifecycle management.

However, it must be noted that traditional SIM card is not going to disappear anytime soon, and Apple?s new range of iPhones is a testament to this fact, given its dual-SIM functionality.

Sealy concluded that ?today the market is not ready to completely embrace the eSIM for a number of reasons, and notably this is due to lack of MNO eSIM readiness. OEMs will need to remain mindful of this to continue supporting their respective global client base until all MNOs are ready to make the switch full time.?

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