Although much-heralded smartphone improvements revolve around higher resolution displays and faster processors, there’s also an important under-the-hood trend: eSIMs, or embedded SIMs, are growing due to their subscription flexibility features, according to market research firm ABI Research.
The recent launch of Samsung’s S20 range of devices with eSIM support are expected to propel global shipments of eSIM enabled smartphones to over 225 million in 2020, said ABI in a report titled “eSIM in the Consumer and M2M Markets.” The firm views Samsung’s support of eSIMs as a key win for the technology, since Apple first announced eSIM support in its XR and S range of devices in 2018.
"It was always a case of when, rather than if, Samsung would support eSIM. 2020 marks a defining year and another milestone for the eSIM market," said Phil Sealy, Digital Security Research Director at ABI Research, in a statement. “Having the largest smartphone OEM onboard, shipping over 200 million devices annually is a significant market step. Industry experts will now be closely monitoring Samsung and how it might start expanding eSIM support to other device ranges, including its Note and A ranges.”
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An eSIM replaces the familiar physical SIM card with an embedded chip that functions in a manner similar to the NFC chip used for payment technology, like Apple Pay and Google Pay. The eSIM is rewritable and can be used for different carriers, as long as the carrier supports it.
ABI Research projects shipments of eSIM-capable phones to exceed 500 million by 2024, based on a continuation of eSIM support from Apple, Google, and Samsung, plus the eSIM expansion by Samsung into other device ranges and several other OEMs launching flagship eSIM enabled devices.
"Despite the optimism and Samsung's inclusion of eSIM technology in its S20 range of devices, there remains much work to be done across the entire value chain," Sealy explained in the report. From a smartphone OEM perspective, Apple, Google, Samsung and Motorola are the only vendors with eSIM capable smartphone devices. Further, although eSIM readiness from an operator perspective continues to improve, there is no operator to date exclusively supporting eSIM. At the same time, many operators are not yet eSIM ready.
According to ABI, eSIMs could trigger changes as they relate to consumer subscriptions and data consumption. As data-centric consumption continues to rise and cellular connectivity enablement increases on more consumer device types (laptops, tablets, smartwatches etc.), emphasis will shift from data-centric billing toward device bundles.
Sealy added, "Device OEMs such as Samsung have an integral role to play in facilitating this transformation. OEMs want to provide flexibility to their consumer device users and create further brand stickiness by enabling a cellular-connected 'family' of products and cross-device mirrored experiences, using eSIM as the enabling technology. Alongside this is an understanding that subscription offerings are evolving (voice packages to data and soon toward device bundles), the latter of which will require Remote Subscription Management (RSM) to share a profile over multiple device types."