Two years on, eSIM technology has proven one of the biggest connectivity breakthroughs
Although the GSMA has been discussing the possibilities of software-based SIM cards for the past decade, it’s only the last two years that eSIM technology has found its way into consumer products. It’s now a $700 million global market, with a strong focus on its implications for the telecoms, automotive, manufacturing, and logistics sectors. It’s also one of the driving techs behind the continuing proliferation of IoT.
Apple was one of the first companies to bring eSIM to the mass market in 2018 introducing it in its iPhones, watches and iPads. Google also added support for the new form factor with its Pixel smartphone. More recently, the world’s biggest smartphone manufacturer, Samsung added eSIM to all its flagship devices. With the leaders of the industry investing heavily in the new technology, it’s only reasonable to expect the trend to continue.
How ready are operators to capitalise on eSIM solutions?
There’s no denying eSIM technology is causing major disruption in the telecoms sector. There has even been word of consumer eSIM being a threat to network operators. Perhaps the most common fear is that consumers will be more likely to change operators on the fly to avoid hefty roaming charges or benefit from more attractive subscription plans. While eSIM certainly provides that degree of freedom, it shouldn’t be taken as a source of fear.
In fact, eSIM device owners can bring more revenue simply because the technology goes far beyond smartphones to incorporate a much wider range of devices. One of the most important advantages to network operators is that eSIM can help resolve a lot of the distribution issues associated with traditional SIM cards. This makes it easier to enter new markets. Already, eSIM solutions have extended far beyond consumer-facing devices to incorporate IoT networks in a wide range of industries from agriculture to logistics.
Recognising the benefits to customers, network operators are more ready to invest in eSIM solutions. Apple already lists around 120 operators across 50 countries catering to subscribers wanting to take advantage of eSIM. By the end of 2019, the number of eSIM-enabled devices surpassed 280 million, with the count steadily increasing, so it only makes sense for operators to support it.
eSIM also gives network operators access to many more market sectors. While they might feel threatened by the rise of consumer eSIM, the better approach would be to see it as an opportunity for capitalising on new markets. For example, Vodafone recently partnered with automobile giant Hyundai to include built-in eSIM technology in its new Venue SUV series. For drivers, this means they don’t need to connect a smartphone to enjoy things like in-car entertainment, navigation, and emergency response. In other words, the cars have mobile network connectivity built in.
Where do device manufacturers stand on eSIM adoption?
For device manufacturers, eSIM is still something of a luxury in high-end smartphones such as the eSIM-enabled Samsung Galaxy S20, iPhone 11 and Google Pixel 2 and 3 series. Catering to early adopters who are willing to spend much more on the latest tech, this market represents the cream of the crop and the highest profit margins.
Some device manufacturers themselves are even starting to phase out traditional SIM cards altogether – Motorola, for example, recently launched the Razr, the first-ever smartphone which doesn’t feature a SIM tray at all. At present, that does mean users will be restricted to the relatively few network operators that support eSIM. However, that’s likely to change as eSIM adoption continues to increase.
For the time being, most eSIM-enabled smartphones will remain backwards-compatible with the older standard. This, however, is itself a barrier to innovation, since it stops manufacturers from realising all the advantages of eSIM – namely the fact not having to include a SIM tray means saving space for other features and functions. On the other hand, by supporting eSIM, manufacturers can bring it closer to mass-market adoption to the point they’ll eventually be able to realise all the benefits of the technology.
Is eSIM technology set to be the new standard in mobile connectivity?
eSIM adoption has undeniably taken a more progressive rather than a revolutionary pace, but that’s not to say it’s not on course to become the new standard in mobile connectivity. With major players like Samsung, Apple and Google leading the way, eSIM providers will likely continue to proliferate, entering low-budget markets as well. In the end, the rapid growth of IoT is making eSIM more of an inevitability and a necessity than just a nice-to-have. And, with the number of connected devices growing all the time, that’s never been clearer.
If you’d like to find out more about the implications of eSIM, we recommend Workz Group, a leader in eSIM technology according to market reports who is recognised by the GSMA as one of only six providers in the world to manage the eSIM across its full lifecycle from production, data generation and personalisation, to subscription management.