The embedded SIM (eSIM) market is projected to increase nearly ninefold, from a relatively small base of 108.9 million shipments in 2016 to 986 million shipments in 2021, industry expert said.
Initially, Don Tait, senior analyst at IHS Technology, said that eSIM shipment growth has been driven by areas such as Machine-to-Machine (M2M) and tablets. Volume growth is expected to jump when eSIM is introduced into the cellular handset and other consumer electronic devices.
“The introduction of eSIM appears more attractive in the non-handset environment. Growth also is likely to occur in segments including wearables, consumer electronics and IoT [Internet of Things] devices, where it can move more quickly because stakeholders do not have to adapt existing legacy processes,” he said.
In the region, the telecom operators in the UAE — etisalat and du — showed eSIM capabilities in October while Saudi Telecom Company has recently announced that it will introduce the eSIM in collaboration with Oberthur Technologies’ subscription platform for the Huawei smartwatch.
Tait said that there has been much hype around eSIM and, specifically, when it finally will be incorporated into the cellular handset.
IHS Markit believes that eSIM growth has been driven by the GSMA and will finally find its way into smartphones by 2018.
“Incorporating eSIM into cellular handsets is likely to happen first with tier-two or tier-three handset suppliers as part of small-scale introductions to test the market. Tier-one suppliers such as Samsung, Apple and Huawei, are more likely to introduce eSIM in their smartphones in 2019,” he said.
Once one of the “top three” smartphone suppliers introduces eSIM into its handset models, he said the market is expected to shift, resulting decreased demand for removable SIMs. On the plus side, SIM card integrated circuit (IC) revenues actually may increase because the SIM card IC price in an eSIM is higher than a removable SIM.
Even though eSIM will gain traction, he said that removable SIM will not disappear overnight. However, the proportional importance of the removable SIM will decline over time, from 5.4 billion shipments (98 per cent of the total) in 2016 to 5.1 billion (83.9 per cent of the total) in 2021.
Source: Gulf News