February 9, 2021

Highlighting the research findings, Senior Analyst Karan Dasaor said, “Apple introduced the eSIM technology two years ago with the iPhone XS and since then all the iPhones have been compatible with eSIM. Google and Samsung are the key vendors driving eSIM adoption in Android smartphones. The growth of 5G  will promote novel device form-factors such as foldables and newer business models. These will be driven by eSIM adoption as shown by the Moto Razr (2020), the world’s first eSIM-only model, and eSIM-only smartphone portfolio launched by new generation mobile operator Rakuten. Going forward, smartphones will remain among the key drivers for adoption of eSIM technology and contribute almost half of the global eSIM capable device shipments in 2025.” Dasaor added, “IoT-based devices and modules have also seen a significant adoption of eSIM, driven by eSIM standardization requirements for M2M/IoT devices. The current eSIM adoption as well as activation rates in cellular B2B IoT are much higher than consumer IoT, as devices are often in difficult places to reach physically, making eSIM a must. The low revenue per connection also works against physical provisioning. Going forward, LPWA technologies (LTE-M and NB-IoT) will be key drivers for cellular IoT devices at mass market scale for things and assets which were never connected before. “Further, Microsoft, Intel and Qualcomm have been focusing on ‘Always Connected PCs’ supporting natively integrated eSIM and LTE modems. Several LTE PCs have already been launched, with eSIM appearing in many SKUs. With 5G likely to reach the mass market in the future, cellular connectivity will become a standard for laptops and those without it will slip towards a minority. We expect eSIM capable PCs and B2B IoT devices to exhibit CAGRs of 75% and 40% respectively over the next five years.”

Key eSIM Insights Dashboard

Commenting on eSIM penetration, Research Vice President Neil Shah said, “Smartwatch and automotive are among the segments which have seen the highest adoption of eSIM so far. Smartwatch-makers have been increasingly adding cellular connectivity for varied use-cases, from health monitoring and safety tracking to making them standalone companion devices. eSIM is a natural fit here from the integrated form-factor, space-saving and ruggedized design perspectives. Apple, Samsung, BBK, Huawei and others have adopted eSIM for their cellular models. “Further, emergency services as well as driving and vehicle condition monitoring via telematics have been the primary drivers for cellular connectivity modules and eSIM capabilities inside vehicles. European eCall mandate, which requires all new cars be to be equipped with eCall technology from April 2018, has also continued to drive greater embedded connectivity. Over the next few years, the addition of connectivity to infotainment for content streaming, live HD maps and other use-cases will drive eSIM adoption. eSIM is expected to permeate into nearly 100% of the cellular connected smartwatches and vehicles by 2025.” Shah added, “Both eUICC (hardware-based eSIM) and iUICC (software integrated eSIM or iSIM) form-factors will co-exist and grow depending on the preference of MNOs and device and module makers. So far, eUICC has been the go-to standard for eSIM implementation. However, iUICC capable devices’ growth is expected to outstrip eSIM devices’ growth with the former growing at a CAGR of around 290% over the next five years. We expect the iUICC-based eSIM to become quite popular among Chinese smartphone brands, as they move from less secure TEE-based virtual/soft SIM to a more robust iSIM solution. Further, players such as Apple and Samsung will also be looking to offer an option to replace hardware eSIM with iSIM if it meets GSMA’s secure element specifications, as it is critical for operator-driven Western markets.” Dasaor also highlighted, “If the iUICC is standardized in next two years or so, we should see a rapid adoption and the segment providing tough competition to hardware-based eSIMs after 2026-27. Role of players such as Qualcomm and ARM will be crucial in driving this across smartphones. We also see a greater interest in iSIM solutions after 2021 in IoT as more module vendors and operators start supporting it formally. Overall, iUICC-based devices will account for 41% of the total eSIM capable device shipments by 2025.”   The comprehensive and in-depth report on “eSIM Ecosystem – Opportunities, Trends, Evaluation, Analysis and Outlook” is part of Counterpoint’s ETO Service. Background: Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media, and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects, and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry. Analyst Contacts: Karan Dasaor    Neil Shah  Counterpoint Research press(at)counterpointresearch.com