Removable Form-Factors to Dominate the SIM Market Despite the Rise of eSIM

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By Phil Sealy | 2Q 2019 | IN-5481

ABI Research recently released its latest forecast data set related to the Embedded Subscriber Identification Module (eSIM) market. Proactive eSIM market tracking is key to understanding the likely market outcomes and potential impacts, given that the eSIM form factor is one that is transformative in nature.

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eSIM: The True Impact on the Removable SIM Cards Market


ABI Research recently released its latest forecast data set related to the Embedded Subscriber Identification Module (eSIM) market. Proactive eSIM market tracking is key to understanding the likely market outcomes and potential impacts, given that the eSIM form factor is one that is transformative in nature.

As a subsequent effect, the eSIM will undoubtedly impact the entire SIM value chain in some way, shape, or form, influencing business models, sales channels, and processes across leading smart cards (including Gemalto, IDEMIA, G+D, and VALID), secure integrated circuit (including STMicroelectronics, NXP, and Infineon), Mobile Network Operators (MNOs) (including Deutsche Telekom, Verizon, AT&T, Reliance Jio, Vodafone, and Orange), and Original Equipment Manufacturer (OEM) vendor landscapes. This executive foresight summarizes the main report findings as they relate to the size of the eSIM handset market today and the likely outcomes and potential impacts (if at all) on the traditional removeable SIM cards market.

eSIM Smartphone Shipments to Exceed 500 Million by 2023


  • Apple announced its iPhone XR, XS, and XS Max in September 2018, each with eSIM integration (with the exception of variants for the Chinese market), together shipping approximately 40 million in 4Q 2018.
  • The year 2019 marks the first full year of XR, XS, and XS Max shipments, and expectations are that future iPhone launches will all include eSIM. Excluding sales in China and non-eSIM legacy devices, ABI Research forecasts that Apple will ship approximately 144 million eSIM-capable handsets in 2019—approximately 70% of its total.
  • Samsung shipments with eSIM are expected to be very low in 2019, accounting for just under 1 million and driven only by the launch of its Galaxy Fold foldable handset (with the assumption of eSIM inclusion).
  • In 2020, it is assumed that Samsung will extend eSIM integration into its flagship Galaxy S range of handsets, likely adding an additional 70 million units in 2020.
  • Combined, Apple, Samsung, and Google will generate a 2020 eSIM smartphone market of approximately 318 million units.
  • By 2020, it has been assumed that China will begin supporting eSIM, and as a subsequent knock-on effect, Huawei will launch its first eSIM handset during the year in its flagship P and/or Mate ranges.
  • In 2021, Samsung will add eSIM functionality into its Galaxy Note range of devices, adding an additional 12 million to 15 million units per year.
  • At the same time, the “Others” vendor category will begin to grow; Xiaomi, ZTE, LG, and Sony are all likely to begin deployment of eSIM in their flagship smartphones, possibly alongside other Chinese OEMs—including OPPO—between 2020 and 2023.
  • However, from 2021, the eSIM smartphone market will likely slow down, driven by the fact that major OEMs will have already released their respective eSIM devices. This means that the total available market becomes less, with the majority of other OEMs not shipping anywhere near the volumes of lead vendors, including Samsung, Apple, and Huawei.

Despite the Rise in eSIM, the Traditional Removable SIM Card Market Will Remain Significant


There is no question that the continual rise of eSIM devices will eventually impact demand for the traditional removeable SIM form factor. However, there is no clear-cut answer as to when this might happen. It is ABI Research’s belief that, despite the rise of eSIM, the removable SIM cards market will remain a significant market force through to 2023 for a multitude of reasons. We outline six primary reasons below.

  • China remains excluded: To date, China remains excluded from the eSIM market, as it has opted for dual-SIM functionality delivered via two traditional removable SIM card slots due to political and identity registration reasons. However, it is ABI Research’s understanding that China is working closely with the GSMA to rectify this situation and will likely result in China moving toward operator eSIM support as early as 2020. Despite this, the eSIM total available opportunity will remain limited by China’s exclusion in the short term.
  • There is uncertainty related to OEM vendor support: Today, the market still awaits the next OEM to announce eSIM support. This is likely to be Samsung, although it could also be a Chinese vendor pending the outcome of the work currently taking place between China and the GSMA. It is ABI Research’s assumption that Samsung will begin eSIM support across its S range of devices in 2020, but should this not be the case, the market will remain limited regarding volumes and will be dominated by Apple until new eSIM handsets are released.
  • eSIM will not result in a 1:1 impact on removable SIM cards: It must be noted that eSIM device penetration rates will not directly translate into a 1:1 reduction in traditional removeable SIM card issuance. Some device users will use both eSIM and removable SIM card slots. In addition, some MNOs may favor the traditional removable SIM while some may opt to completely transition to the eSIM.
  • MNO support remains fragmented: In the short term, MNOs will likely support both the eSIM and removable SIM slot to offer consumers a choice, or they will continue to support the traditional removeable SIM for existing customers and move new customers onto eSIM. It’s important to note that no pure eSIM handset is currently available. An eSIM-only device is not likely within this forecast period as OEMs continue a dual SIM approach to ensure continued global distribution.
  • MNO readiness is still at a low level: MNO readiness remains a major barrier to blanket eSIM support. As such, there will be a significant transitional time period where a combination of eSIM and traditional removeable SIMs are supported. This period will last years.
  • Little education is offered to users: The true value of the eSIM resides in its Remote Subscription Management (RSM) capabilities. However, little work is being done to educate the user base of its benefits. For this reason, there is little to no consumer demand for the technology as the consumer remains impartial to the eSIM form factor.

Prior to eSIM’s inclusion within Apple XR and XS devices, shipments of removable SIM cards have already experienced slowing year-over-year growth rates.This is largely because the subscriber market is well saturated and devices are getting more expensive, thereby lengthening replacement cycles and directly impacting SIM-card churn rates. Other more regional factors that slow growth include lead times for processing ID registration, the end of significant promotions in emerging regions, and operator consolidation.

eSIM is expected to have a slight impact on the traditional removable SIM cards market in 2019, with a more significant ramping up expected between 2020 and 2021. This increase will align with new eSIM handsets hitting the market, including those from Samsung and Huawei, along with broader support for Apple devices.

Overall, the impact of eSIM on the traditional removeable SIM cards market is clear. Despite this, any reduction in removeable SIM shipments will be limited until the points outlined above can be addressed. Of notable importance is the continued use of a removeable SIM with eSIM for eSIM-enabled smartphone models over the forecast period. For these reasons, while we acknowledge the impact of eSIM on the removable SIM cards market, ABI Research forecasts that eSIM will still command market share past 2023 and will continue toreach issuance levels well above 4 billion units annually.