Embedded SIMs to represent a significant volume by 2020

According to the different scenarios developed in the Smart Insights Report 346 to 864 million handsets with eSIM will be shipped yearly by 2020, and will impact the traditional SIM industry as 1,054 to 3,493 million SIM card units will be missing. The traditional SIM card industry will see at least 16% of its shipments disappear by the end of the decade.

Soldered inside handsets, eSIMs provide the same functions as traditional SIM cards. New players will emerge disrupting the usual business models. Automation of subscription management and the appearance of an intermediary to manage subscriptions among multiple MNOs and end-users – a subscription manager – are likely to develop. Coming from M2M (machine to machine) and IoT (Internet of Things) markets, the eSIM has a huge potential to modernize the telecoms industry and the way connectivity is delivered to consumer devices such as wearable devices, tablets and smartphones.

For smartphones, the Smart Insights Report analyzes three possible adoption scenarios demonstrating that the adoption rate will be differently influenced by the players driving the disruption:

Scenario 1 – GAFAS drive adoption. GAFAS refer to Google, Apple, Facebook, Amazon, Samsung, but other large and innovation hungry competitors are also potential drivers for eSIM adoption,

Scenario 2 – Disrupter drive adoption. Disrupters include small and innovative players looking for an opportunity to disrupt the market and win their position among larger players,

Scenario 3 – MNOs drive adoption. Large MNOs will drive adoption motivated by the need to keep their position in the value chain and direct relationship with end-users.

Integration of eSIMs on smartphones will oblige OEMs to face a period where they will have to adapt their devices to support both eUICC and removable SIM.

Thierry Spanjaard, CEO of Smart Insights declares: “The mobile communication industry is bound to experience drastic changes with the inception of eSIMs. The balance of power between mobile network operators, handset vendors and third parties such as the GAFA will be transformed with this technology evolution.”

Silvana Pintão, industry analyst for Smart Insights and author of the report adds: “The inception of eSIM will bring power to new entrants in the mobile communication ecosystem. Once standardization is achieved, the power of the new players will drive a fast mass-adoption.”

The Report explores in detail the business models of the various eSIM stakeholders, and establishes three possible development scenarios for this exciting market. The research has been conducted combining Smart Insights long-standing experience in the secure transactions industry with interviews with key players in the telecoms industry, such as mobile network operators, standards organizations, technology developers and systems integrators specializing in this area, and leaders in the secure transactions industry.

The Smart Insights Report “eSIM to reshape mobile communication” is available at http://www.smartinsights.net/Smart-Insights-Reports


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