Consumer eSIMs: Unlocking New Opportunities Across Verticals

April 2021

Telecoms & Connectivity

Scarlett Woodford

Principal Analyst

In comparison to a traditional SIM card, which can be removed from a device, an eSIM is soldered directly into a compatible device or sensor and, therefore, cannot be removed. If a user wishes to change operator profiles using a traditional SIM card, they simply remove the existing card and replace it with a SIM card from the newly chosen operator. 

Due to an eSIM’s embedded nature, however, it is not possible to remove the eSIM. Instead, eUICC software enables eSIM modules within connected devices or sensors to remotely switch between operator profiles. This allows for increased flexibility in industrial and consumer use cases, with both sectors benefitting from the enhanced network coverage realised by eSIM connectivity.

For network operators, the most lucrative opportunity for eSIM deployment within smartphones revolves around mobile roaming activities. Using eSIM data plans, subscribers are only required to buy a data plan that covers the country they are travelling to. That is, eSIM technology enables travellers to adopt roaming plans without upfront subscriptions or commitments; using a pay-as-you-go model. Roamers can store multiple eSIMs on a single handset, but only one eSIM can be used at any one time.

The demand for eSIM-compatible tablets is expected to grow over coming years, with geographic regions where Apple has a high market share experiencing the greatest adoption. At the same time, the majority of manufacturers offering eSIM enabled tablets also offer eSIM-enabled desktops and notebooks, with the exceptions of Apple and Microsoft. However, in order for manufacturers to produce a wider range of eSIM-compatible desktops and notebooks, eSIM activation within these devices must be simplified.

Head-mounted devices (namely, VR and AR headsets), consumer wearables (especially smart watches and fitness wearables) and connected consumer vehicles will also see an increased eSIM adoption. Another possible growth area is smart meters, which rely on connectivity provided by mobile networks and are, therefore, not suitable for people living in more remote areas. The use of cellular eSIMs could remedy this situation; offering connectivity to areas that were previously inaccessible to energy providers using network coverage.

eSIMs will also play an increasingly important role within the smart home ecosystem, especially with regards to smart home automation and security systems.

In terms of eSIMs adoption, the consumer sector will account for 94% of global eSIM installations by 2025. Established adoption of eSIM frameworks from consumer device vendors, such as Apple and Google, will accelerate the growth of eSIMs in consumer devices ahead of the industrial and public sectors. Global eSIM deployments across all consumer verticals will increase by 170% over the next four years, with widespread adoption reliant on backing from network operators. We therefore urge manufacturers to place pressure on operators to support eSIM frameworks and accelerate market maturation. 

However, we also believe that fragmentation of hardware vendors in the cellular IoT device market will necessitate each vertical to adopt a combination of wireless technologies, hardware, and management tools. In turn, specialist vendors will emerge that provide robust eSIM form factors for industrial environments. 

Our latest whitepaper, Unlocking the Potential of Consumer eSIMs, analyses the current eSIMs landscape across a variety of verticals, highlighting implementation strategies and opportunity.