eSIM moving up the agenda: from industry work to customer adoption

2020 is a turning point for eSIM, with the top three smartphone makers, representing more than half of the global market, now fully on board. Apple, the eSIM pioneer, has launched a mid-price eSIM iPhone, moving the boundaries of eSIM availability beyond the high-end consumer segment. Meanwhile, Samsung and Huawei have doubled down by launching new smartphones with both 5G and eSIM. eSIM service availability is also on the rise: a minimum of 158 mobile operators (including a few MVNOs) currently offer eSIM service for smartphones, spanning more than 60 countries across all regions but Africa. The number of operators doubled over the last 12 months – a clear sign that operators are increasingly embracing eSIM.

For OEMs and operators that have yet to launch, supporting eSIM is not a matter of if, but when. Our research reveals that two out of three operators plan to make eSIM service available by 2021. However, customer adoption at scale will take time, largely due to smartphone replacement rates (2–3 years in most countries). We forecast 2.5 billion eSIM smartphone connections globally by 2025 (35% of total smartphone connections), with 2 billion and 3 billion as low and high adoption scenarios respectively. Europe and the US lead in the early days of eSIM adoption, but China will be the largest market by 2025.

IoT is a promising area for eSIM. Nearly 40% of enterprises believe that eSIM is very important to achieving success in their future IoT deployments. Connected cars with eSIM technology are already mainstream, while other IoT vertical sectors provide new opportunities, especially if such ecosystems move from the siloed initiatives seen today to sector-wide deployments. eSIM smart meters are gaining momentum in various countries.

Covid-19 likely affected the growth of eSIM activations in H1 2020 (mostly due to a lack of international travel), but it is also driving an unprecedented shift to online/digital channels, which should help boost eSIM adoption going forwards.