A report from the GSM Association (GSMA) was released earlier this month, presenting their research from a smartphone survey of over 100 mobile operators worldwide. Examining the adoption of eSIM, the report addressed the implications for eSIM stakeholders and gave useful insight into the rapid development of embedded-SIM technology. Expanding on this analysis, eSIM.net present a report and infographic addressing eSIM trends and insights for 2025.
eSIM trends in current market
An eSIM (“Embedded Subscriber Identification Module”) is a programmable SIM card that is embedded inside a device and can be connected to any mobile network. Thought of as a virtual SIM card, it is a technology that has been quietly progressing yet is not new. Apple has been backing the technology since 2014, first included in the iPad Air 2.
However, it took until September 2018 for Apple to turn on support for eSIM technology. This, in turn, caused eSIM mobile network operator support to skyrocket globally. iOS 12.1 kick-started a rapid adoption process, from only 15 operators worldwide in November 2019 to over 100 in January 2020.
This expansion in eSIM support by mobile network operators aligns with a recent study by ABI Research. They predicted over 225 million eSIM-enabled handsets will be delivered by the end of 2020. It is not Apple alone, however, that is championing eSIM in its handsets. ABI Research attribute this propulsion largely to Samsung, who recently launched their S20 range of devices. Many other OEMs have also launched eSIM-enabled devices. Google’s Pixel range has supported eSIM since 2018, while Motorola’s Razr was released as eSIM-only – the first handset of its kind to do so.
Interestingly, Huawei have yet to release true eSIM functionality in their smartphones. Similarly to Xiaomi, they have instead been offering a proprietary virtual SIM for several years. This is surprising considering GSMA survey results ranked eSIM-capability as highly as 5G; a focus for many OEMs.
Despite the growing number of eSIM-enabled handsets on the market, of the 2 billion mobile connections facilitated by the 108 mobile operators supporting eSIM, connectivity through eSIM is negligible.
Barriers and catalysts for eSIM growth
GSMA’s survey announced that 31% of European operators are waiting until 2022 or 2023 to launch eSIM services for smart phones. Is their delay related to the slow adoption of eSIM connectivity among consumers? We explore three barriers and potential catalysts for growth.
Number of handsets available
In data supplied from Counter Point Research on global smartphone market share, Apple, Samsung and Huawei collectively captured 50% of the smartphone market in Q4 2019. At the time of publishing, only one of the three giants – Apple – offered eSIM-enabled handsets. This significantly reduced the opportunity for consumers to engage with eSIM technology. As of February 2020, Samsung launched their flagship S20 series. This has helped push eSIM to the forefront and will allow their users to finally get to grip with eSIM. As more consumers gain access to eSIM, we expect to see the adoption rate rise.
Support from operators
While 108 mobile network operators support eSIM around the world, this is only a fraction of the total number: 816. Lack of expertise and costly investment are just two of the reasons operators are reluctant to embrace eSIM services. This has resulted in limited support for potential eSIM consumers. This, combined with ingrained consumer buying behaviours (customers looking to their traditional network operator for service plans), results in fewer consumers being exposed to eSIM.
As a solution to this problem, a number of online eSIM stores have begun to offer global roaming eSIM plans. This allows consumers to make use of their virtual SIM card anywhere around the world. As awareness of these options increase, eSIM adoption will grow.
End user education about eSIM
Traditionally, consumers seek tried-and-tested channels through their mobile operator for service plans. But with limited support from operators worldwide, this has resulted in very little end user education about eSIM. While Apple has championed eSIM adoption for years, the majority of operators that do offer eSIM have yet to publish detailed guidelines or specifications regarding their services. With nearly 60% of operators who do not offer an eSIM service planning to do so by the end of 2021, greater education about eSIM should help adoption rates rise.
GSMA’s eSIM trends and insights for 2025
Slow adoption rate among consumers has not slowed down industry growth and expected eSIM use by 2025, however, as discovered in GSMA’s smartphone survey.
Looking to 2025, the GSMA expect:
- 60% of smartphone unit sales will be eSIM-compatible
- Between 2 and 3 billion smartphone connections worldwide will use eSIM (low and high adoption scenarios, respectively)
- China to become the largest eSIM market, with half a billion eSIM smartphone connections
What about eSIM-only handsets?
Results from GSMA’s smartphone survey indicated that 40% of mobile network operator respondents expected manufacturers to release eSIM-only models between 2020 – 2021. However, GSMA were quick to note that this figure may be optimistic considering that many OEMs are yet to offer eSIM-enabled devices. Factoring in a two to three year replacement rate, GSMA expect handsets with removable SIMs to remain in place for several more years.
In the same study, non-phone devices contributed to 25% of the total number of consumer devices sold by mobile network operators. This highlights the opportunities available for eSIM outside of the traditional handset market. Microsoft, Lenovo and HP have already begun selling eSIM-enabled laptops, while a selection of smartwatches and tablets have been supporting eSIM for many years.
The research presented in GSMA’s March 2020 report made for fascinating reading. It highlighted an industry that has been aggressively pushing forward in the face of what appears to be slow consumer adoption rates. Examining their eSIM trends and insights for 2025, it is clear that the GSMA is expecting rapid growth in the coming years, from operators, OEMs and end-users alike.
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Global Smartphone Market Share: By Quarter, Counter Point Research
eSIM in the Consumer Market, ABI Research
The Future of eSIM in Smartphones: Are we at a Turning Point?, GSMA