After spending more than a decade offering a potential breakthrough in mobile communications, embedded subscriber identity module (eSIM) technology has enjoyed noticeable growth in the past 12 months, making its way from smartphones to smart devices.
Driven by Apple innovation disrupting the smartphone sector, the value of the global eSIM market is expected increase from $4.7bn in 2023 to $16.3bn by 2027, according to a study from Juniper Research.
The Juniper report, eSIMs: Emerging trends, strategic recommendations & market forecasts 2023-2027, reflects the views of industry analysts and mobile trade associations – namely that mobile device users are ready to wave goodbye to plastic SIM cards and embrace next-generation technology in smartphones to unlock a wide range of benefits.
Fundamentally, eSIM technology, embedded in devices and sensors such as internet of things (IoT) equipment, enables users to activate a cellular plan from a mobile network operator (MNO) without the need for a physical SIM card in the device and switch seamlessly between network operator profiles.
Manufacturers are increasingly offering eSIM-enabled devices, while more than 200 MNOs in over 70 countries already provide eSIM provisioning and management.
A July 2022 study from global mobile trade association the GSMA found 260 mobile operators in 88 countries already offered commercial eSIM services for smartphones and forecast that eSIM would account for 76% of all smartphone connections.
Juniper expects that by the end of 2023, the eSIM market will have grown year-on-year by an “impressive” 249%, with the market driven by the adoption of eSIM-enabled consumer devices, as seen in the eSIM-only iPhone 14 in the US, triggering accelerated operator support. Indeed, the research predicted that Apple would expand deployment of eSIM-only devices to Europe this year, with eSIM technology key to minimising the time-consuming establishment of roaming agreements in the fragmented European telecommunications market.
The analysis predicted the total number of smartphones leveraging eSIM connectivity would increase from 986 million in 2023 to 3.5 billion by 2027, with manufacturers such as Google and Samsung developing an equivalent eSIM-only Android device to compete with Apple and maintain their global market positioning.
Another spur to the market looks to be found in China. The report calculated that assuming country-specific standards are implemented, allowing eSIM use in smartphones, the total number of eSIM-connected smartphones in China would increase from 103 million in 2023 to 385 million by 2027. The analyst noted, however, that current regulations prevent Chinese-based device manufacturers from selling to their home market, limiting investment and innovation.
In a call to action in response, the report urged industry bodies to work closely with the Chinese government to develop specifications that allow eSIM support while addressing requirements for device monitoring and tracking.
“Despite operator concerns regarding the disruptive impact of eSIMs on existing business models, growing support from smartphone manufacturers will place additional pressure on operators,” said research author Scarlett Woodford. “In response, service providers must support eSIM connectivity to avoid subscriber attrition as technology awareness increases.”