The overall eSIM market was valued at USD 253.8 Million in 2017 and is estimated to reach USD 978.3 Million by 2023, at a CAGR of 31.0% between 2018 and 2023. In terms of volume, the overall eSIM market registered a shipment of 287.7 million units in 2016 and is likely to witness a shipment of 1,168.8 million units by 2023, at a CAGR of 32.4% between 2018 and 2023.

Market Dynamics

Driver: Emphasis on remote SIM provisioning for M2M

Remote provisioning is the ability to download an operator profile to an in-market SIM and change or delete the subscriber identity module (SIM) profiles without the need for having physical access to the SIM card. The eSIM card is a critical enabler for machine-to-machine (M2M) connections, which includes seamless and straightforward mobile connections for all types of connected devices. The ubiquitous connectivity of devices across geographic regions is a prerequisite for M2M. Embedded SIM removes the inconvenience of changing service providers, which leads to operational efficiency, and it operates in a controlled and secure environment. The latest embedded SIM cards offer guaranteed profile interoperability and a primary platform for the players to work on common grounds.

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Restraint: Intensifying security threats

With technological advancements, penetration of IoT devices, and proliferation of M2M services, it becomes increasingly important to ensure secure and reliable communication among connected systems. Therefore, the task of preserving the security of these systems has become complex. Embedded SIM cards allow remote provisioning of SIM profiles by enabling automatic interoperability between connectivity platforms and multiple SIM operator profiles. However, the operational flexibility achieved by an embedded SIM would be a futile effort if security is compromised. The eSIM collects and stores the credentials of mobile network operators (MNOs) in the inbuilt software of the device, which is prone to various security hacks. Also, it operates through multiple MNOs and physical platforms, thereby exposing it to the risks of the virtual environment.

Opportunity: Growing demand for smart solutions

Smart solutions, such as electric vehicles, smart cities, and smart meters, are increasingly adopted across the world due to the flexibility and connectivity offered by the IoT infrastructure and accelerated push for smart cities and infrastructure growth in emerging economies. The evolution and expansion of networks, reduced cost of hardware components such as sensors and actuators, and the emergence of new business models are some of the key factors that will lead to the introduction of services such as deployment of smart grids, automatic security systems, connected cars, among many others, thereby rising investments in developing innovative smart solutions. Thus, the growing demand for smart solutions for several applications in verticals such as energy & power, automotive, healthcare, and agriculture is likely to create growth avenues for the players in the eSIM market.

Challenge: Lack of standardization

The ESIM value chain is highly complex and involves multiple stakeholders. Due to this, stakeholders are required to coordinate and cooperate for setting standards concerning economies of scale, interoperability, and IoT technologies, including machine-to-machine communications and ubiquitous sensor networks for the effective implementation of embedded SIMs across myriad applications. To overcome this challenge of lack of standardization and to facilitate the industry-wide adoption of eSIM, international organizations, including the European Telecommunications Standards Institute (ETSI) and the GSM Association (GSMA), are focused on creating standards on technical and operational aspects.