The Reach of the eSIM – Embedded SIM – Grows Further

The Reach of the eSIM Grows Further

The global mobile technology market can best be described as dynamic and fluid. Innovation seems to be the order of the day with new devices, apps, and other components frequently added to the market. The latest of these, eSIM, is taking the market by storm. It is a versatile technology comprising a rewritable, embedded SIM card which is compatible with all major carriers irrespective of the type of network. Its use also extends to other industries such as automotive and consumer electronics.

What Is an eSIM and How Does It Work?

eSIM is an acronym for embedded subscriber identification module. It is also referred to as embedded universal integrated circuit card (eUICC). In terms of dimensions, it measures 5mm x 6mm, and it is built into the device’s motherboard at the point of manufacture.

Compared to the conventional, removable SIM cards, the eSIM card is more flexible and allows for greater connectivity. It comes with machine-to-machine(M2M) capabilities which means it can facilitate the exchange of information among networked devices.

The eSIM card also gives customers the freedom to switch to a mobile network operator of their choice in real time through a phone call. This is a huge relief from the traditional SIM cards where to change a network means popping out the card and replacing it with your preferred carrier.

The Global eSIM Card Market

According to a report by Transparency Market Research, the global market for eSIM card is likely to witness intensified level of competition, following the entry of new players. Currently, the major players in the market are Apple Inc., Telefonica S. A., NTT DOCOMO Inc., ST Microelectronics, Sierra Wireless Inc., Deutsche Telekom AG, Giesecke & Devrient GmbH, and OT-Morpho.

The report further states that the eSIM card market has the potential of rising from its 2016 valuation of $4,096 million to $14,613.1 million by 2025, the end of the forecast period. This represents a compound annual growth rate (CAGR) of 13.5%.

The dominant market share in 2016 was accounted for by the European market followed by the North American market. Favourable government policies that push for the uptake of data exchange and automation technologies in Europe have been cited as the reasons behind the market dominance.

The Key Drivers of the Global eSIM Market

The industry growth rate is fast and steady, fueled by several factors. Some of the key market drivers include:

  • Real Time Switching of Network Providers:
    The eSIM technology allows subscribers to change their network carriers in real time Over the Air. Effectively, this puts to an end the issue of international roaming charges. When used in smart metres and connected cars, this facility helps in lowering logistics and operational costs.
  • Standardisation of Technical Specifications:
    Groupe Speciale Mobile Association (GSMA) is the trade body responsible for standardising the eSIM technology to provide for better security and conventional application. The body represents the interests of more than 800 mobile network operators all over the world and a further 300 associate members.
  • eSIM Compact Design:
    The design flexibility that comes with eSIM technology will allow device manufacturers to utilise the saved space for other functionalities such as additional storage and enhanced battery size. They can also shrink the device size without compromising on other features.

The Wide Array of eSIM Applications

The initial application of the eSIM card technology is in smartphones. Samsung and Apple are expected to be the early adopters in integrating this technology into their high-end devices. As a matter of fact, there are speculations that Apple will build an eSIM card into their next iPhone X scheduled for 2018.

In the wearables space, Huawei Watch 2 Pro and Apple Watch Series 3 have already integrated the embedded SIM cards.

The application of eSIM technology will undoubtedly have a positive impact on the Internet of Things (IoT). Many of the devices in the IoT ecosystem such as smart appliances, wearable gadgets, and data sensors rely heavily on cellular connectivity. This is where the eSIM will find its utility.

The automotive industry is one of the other beneficiaries of this technology together with consumer electronics.  Already, eSIM technology is being used for functions such as weather information and infotainment in the automotive industry. Arguably, the widest usage of the technology is in connected cars where an array of applications such as engine management, remote vehicle monitoring, automated emergency calling in case of accidents, and many other functionalities have already been rolled out.

Considering the pace of growth and adoption rates of the eSIM technology, the upward trend will most likely be sustained into the foreseeable future. More device manufacturers will venture into this space and carriers will start aligning themselves and making their networks compatible. The traditional SIM setups will continue being in operation for the next little while, but eventually eSIMs will take over!



Neil Aitken

Having worked in 3 countries for 4 telcos on both voice and data products, Neil is in a position to give you the inside track. Get beyond the marketing messages to the best plan for you.