9^th December 2020, London, UK: eSIM will connect 2.4 billion devices in 2025, according to a new study by leading research firm Kaleido Intelligence. The report, eSIM Market Outlook, provides the most comprehensive analysis on the eSIM market available to date.

The study, which examines GSMA-compliant eSIMs across consumer and IoT markets, found that eSIM will witness substantial growth into the medium-term, with eSIM compatible devices growing at a CAGR of 45% between 2020 and 2025. It expects some 3 billion devices will be installed with an eSIM in 2024, with growth driven by smartphones alongside IoT demand.

Apple’s iPhone range has undoubtedly catalysed the consumer industry following the launch of eSIM compatible devices in 2018, while Kaleido found that a substantial proportion of Request for Proposals (RFPs) in the industrial sector are now listing eSIM as a requirement.

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Smartphones and Industrial Use Cases to Drive eSIM Demand

There can be no doubt that COVID-19 has had a significant impact on the eSIM market in 2020. Automotive, a long-standing IoT vertical for eSIM, has seen vehicle shipments fall by over 20% year-over-year, while the pandemic has slowed eSIM adoption among lower-tier smartphone OEMs alongside a contraction in smartphone shipments in some markets.

However, Kaleido believes that mid-tier smartphones will begin to support eSIM from 2022 onwards, while logistics, energy, manufacturing and industrial applications are set to become key eSIM verticals on the IoT side. This traction will bouy the market to the extent that eSIM hardware shipment sales will reach $1 billion in 2023.

KORE, Eseye and Tata Communications offer strong, innovative eSIM propositions

Kaleido found that although eSIM is shipping in significant volumes, the hardware is not always used for connectivity. This is certainly the case in the current smartphone market, while even many automotive OEMs do not use the operational profile on the eSIM for connectivity.

Additionally, eSIM support from a regulatory and MNO perspective is not yet fully developed. For example, China’s regulator has not formally approved the GSMA’s eUICC (eSIM) specification, leading to low eSIM activation rates, while domestic non-GSMA-compliant eSIM solutions exist in the country, further fragmenting the market. Although MNO support for eSIM has notably grown over the past 24 months, coverage has yet to reach the majority of operators. In turn, this has led to several MVNO and eSIM enabling players, such as KORE, Eseye and Tata Communications, to offer strong, innovative eSIM propositions backed by broad connectivity footprints.

Steffen Sorrell, Research Lead at Kaleido, noted: “eSIM activation rates are low due to a combination of ecosystem support, the regulatory environment, and consumer awareness. However, operators see the upside to eSIM in terms of split billing and bundled services. Increased eSIM support coupled with innovation to overcome technical challenges on remote IoT SIM provisioning alongside a strengthened business case for eSIM among several IoT verticals, will see connectivity activation rates reach over 50% in 2025”

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About Kaleido Intelligence

Kaleido Intelligence is a specialist consulting and market research firm with a proven track record delivering telecom research at the highest level. Kaleido Intelligence is the only research company addressing mobile roaming in its entirety, covering:

• Data Forecasts by Market
• Historical & Forecast Viewpoints
• Competitive Intelligence
• Strategic Insight
• Trend Analysis

Research is led by expert analysts, each with significant experience delivering telco research and insights that matter.