eSIM-Capable Devices Set for Hyper-Growth after Crossing Inflection Point

More than 6 billion xSIM-capable devices will be cumulatively shipped over the next five years, covering all form factors including hardware-based eSIM, iSIM, nuSIM, and Soft SIM, according to Counterpoint Research. eSIM adoption has passed the inflection point and is now entering a high-growth phase, driven by the rising adoption of eSIM in smartphones, connected vehicles, and cellular IoT applications.

The next phase of growth will be driven by greater awareness of eSIM among mobile network operators (MNOs) and device manufacturers, facilitated by the flexibility, cost efficiency, security, cost savings, and above all, the key role eSIM is playing in the digital transformation of MNOs. In 2022, eSIM-capable device shipments grew 11% YoY to reach 424 million units despite a 3% YoY fall in overall cellular-connected device shipments due to weaker demand for smartphones. Globally, more than 275 MNOs support eSIM and provide connections to 30+ different eSIM-capable consumer device models on average. Furthermore, the number of cellular IoT modules and devices is continuously growing.

“The physical MFF2/WLCSP form-factor soldered eSIM chip has been the go-to standard for eSIM implementation alongside the other niche alternative implementations such as soft SIM and nuSIM. Over the next five years, hardware-based eSIM (eUICC) will remain the dominant eSIM form factor and will account for more than half of all shipments,“ said Neil Shah, Research Vice President at Counterpoint Research.

“The first wave of mainstream iSIM adoption will be seen across IoT applications driven by leading IoT chipset and module players such as Quectel, Telit, Sequans, and Sony Semi (Altair) in partnership with leading xUICC players like Kigen, G+D, and Thales. Other key stakeholders driving the adoption of iSIMs would include Qualcomm, IDEMIA, Truphone, Redtea Mobile, Oasis SmartSIM, Apple, Samsung, and Nokia. Beyond 2028, iSIM is projected to take over as the dominant SIM form factor, with the shipments of iSIM-capable devices poised to climb to a cumulative 4 billion units by 2030,“ added Shah.

“Smartphones have been key in driving primary eSIM awareness among consumers and MNOs and will continue to be the dominant eSIM-capable device category. Cellular connectivity in smartwatches is growing steadily which is also helping increase the penetration of eSIM-supported smartwatches. The adoption of entitlement servers by MNOs worldwide is a testament to the growing number of smartwatches and other companion devices powered by eSIM. Other cellular-capable consumer devices such as laptops and tablets will also see rapid eSIM adoption in the coming years,“ said Ankit Malhotra, Senior Analyst at Counterpoint Research.

“The number of IoT/M2M devices equipped with eSIM is poised to grow faster than consumer device categories due to the natural cost, space, and remote device management benefit that eSIM offers. The new eSIM IoT specifications SGP.31 by GSMA will accelerate eSIM adoption in the IoT segments potentially eradicating complexities of the existing eSIM Remote Service Provisioning (RSP) platform SM-DP/SM-SR for M2M/IoT segments,“ concluded Malhotra.

Emerging device categories such as XR, drones, and cellular gateways/FWA CPEs will be the fastest-growing categories. 5G-connected drones are another category that will benefit from eSIM technology and drive adoption across several use cases like last-mile delivery, disaster management, search and rescue, education, construction, and agriculture. Regulation of beyond-visual-range drones in regions such as Europe will increase the adoption of eSIMs as well. Automotive and smart mobility are huge growth areas as well. Connected cars are one of the largest and most obvious use cases for eSIMs. Consistent connectivity experience for mobility applications is becoming paramount, particularly for safety use cases such as eCall and the future rise of autonomous driving.