eSIM technology still sounds enigmatic to many, but recent research proves it has every chance of becoming a new reality in less than ten years. In its report, Spotlight says global sales of eSIM-compatible smartphones will rise from 27% to 56% by 2028. That is more than half of all sales of smartphones. From there on, it’s only a matter of time before eSIMs are adopted as the new standard.
Increasing demand for connection devices is expected to drive the eSIM industry in the coming years. The eSIM market is predicted to increase at a 29.4 percent CAGR from $4.7 billion in 2023 to $16.3 billion in 2027. This increase will be driven by the growing number of IoT devices that rely on eSIM technology. In 2028, the market will be worth around $17.91 billion. The number of eSIM users will rise from an estimated 40 million in 2024 to 215 million by 2028, according to Juniper Research.
How will such a change affect customers, manufacturers, and mobile operators alike?
Embracing the New Technology
eSIM is such fast-growing technology that is bound to change the way we connect to mobile networks. The full form of eSIM is ’embedded SIM.’ As the name suggests, this technology helps customers get virtual SIM cards and no longer requires plastic cards like earlier. This means that consumers do not need a regular nano-SIM to connect to the network.
For sure, Apple remains the most recognized company that has fully embraced eSIM technology. The recently released iPhone 14 is now perhaps the most famous example across the US of an eSIM-only smartphone (though not the first one ever—Motorola made an eSIM-only phone before that).. Nowadays, virtually all the key makers of smartphones support eSIM in their newer models, with many companies becoming names like Samsung, Huawei, and Xiaomi, but still, most of them aren’t going to stop putting standard SIM trays yet.
In the US, it is Apple that largely drives the adaptation of eSIM card technology. Other companies, however, will not allow themselves to be left behind their rivals. On the part of the mobile operators, they seem very much willing to change based on the demands of their market. For one, by switching to eSIMs, they can save money on production costs. Another reason is that it enables mobile operators to be hailed for their environmental consciousness. After all, the eSIMs are a more environmental-friendly option compared to the traditional plastic SIM cards. Plastic cards require manufacturing and physical delivery, unlike eSIMs.
Will Customers Willingly Adapt to eSIMs?
Phone manufacturers are changing to keep up with innovations coming from other companies, but will consumers embrace these changes? As indicated in the report above, only 4 in 10 had heard of eSIMs. However, once the technology was explained to consumers, more than 75% of those asked said they were interested in eSIMs.
However, the application of eSIM does not stop at its inclusion in a smartphone. This also comprises a wide array of connected devices which notably includes cars and tablets along with smartwatches. 39.2% of eSIM market constituted connected cars in 2023. The more the devices that would support eSIM technology, the higher would be the rate of its adoption.
Here are some of the benefits that eSIMS have over regular SIM cards that could affect the mobile plan sales of the future:
- Cost-effectiveness: eSIM service providers have a number of data plans designed to provide customers with low-cost internet abroad by avoiding the charges associated with international roaming.
- Convenience: Unlike a conventional SIM, which one has to get physically and insert into the device, an eSIM is activated in some clicks. All that the client has to do is download an eSIM app, buy and activate a plan, and get online abroad.
- Flexibility: Most of the new devices supporting eSIMs allow customers to install two eSIM cards at the same time, thus easily picking which networks they want to use.
- Sustainability: Manufacturing and shipping of eSIMs are not required. Therefore, their implementation all around the globe would reduce Co2 production and plastic waste, a key incentive to environmentally conscious customers.
eSIM: Disruptor or Improvement?
Considering the pros of eSIMs over plastic cards, the new technology offers much more opportunities than challenges—at least from a consumer perspective. But as far as manufacturers and operators are concerned, changes will have to be made. In the United States, there are about 50 providers supporting the technology, but that doesn’t reflect the whole world. While eSIM cards are still a novelty globally, soon many more devices will be compatible and operators will have to adjust accordingly. With huge advantages that it offers and the pace of its market adoption, it is ready to shift from a niche technology to the standard. By 2028, more than half of all smartphones sold globally will be eSIM-compatible, marking a significant change in how we connect and communicate.
