eSIM Market Size, Share & Trends Analysis Report By Solution (Hardware, Connectivity Services), By Application (Consumer Electronics, M2M), By Region, And Segment Forecasts, 2020 - 2027

Report Overview

The global eSIM market size was valued at USD 8.03 billion in 2019 and is expected to expand at a Compound Annual Growth Rate (CAGR) of 15.8% from 2020 to 2027. The rapid increase in the number of IoT connected devices in different end-use verticals such as automotive, consumer electronics, and energy and utilities, is propelling the market growth. Moreover, eSIM technology has led to advancements in the connected ecosystem by enabling secure Machine-to-Machine (M2M) communication. Thus, eSIM offers secure, reliable, and cost-efficient cellular connectivity for IoT/ M2M applications owing to which there has been increased adoption of the wireless cellular-based solution such as eSIMs among different end-use verticals.

eSIM is a hardware chipset that is permanently installed in the device, on which the Mobile Network Operators (MNOs) can store their data through radio signals. Also, the size of the chipset is smaller than a nano sim and can be reprogrammed by the software; thus, eSIM provides all the services like the physical SIM cards. Moreover, eSIMs offer several benefits over traditional SIM cards, such as supporting multiple mobile carriers, which makes the subscription management easier for the device end-user; thus, eliminating the need for handling several physical SIM cards by the device end-user. Another benefit of eSIMs is their physical security, as they are directly soldered to the circuit of the device, it is impossible to tamper the device to remove the SIM for misuse. The aforementioned benefits are anticipated to fuel the growth of the market.

Additionally, a significant factor driving market growth is the increase in the number of M2M connections globally. As the communication in M2M connections is carried over the mobile networks, these SIMs play a significant role in wireless communication in the connected ecosystem. Moreover, remote provisioning and longer life span have resulted in increased adoption n the M2M applications such as smart meters, connected cars, and retail POS. Also, they require lesser space in the M2M devices, thus making it an ideal preference among device manufacturers. Hence, the features and functionalities offered by eSIM for M2M applications have resulted in the adoption of eSIMs among device manufacturers, thereby bolstering the market growth.

However, some of the factors restraining the eSIM market growth include lack of technology awareness among end-users and a smaller number of MNOs supporting eSIM technology globally. Similarly, the technical support provided by the MNOs in several countries is also different. Thus, adoption of eSIM technology among telecom carriers is crucial for market growth. For instance, Apple Inc. has launched different models of iPhones that have preinstalled eSIM in it. However, in developing countries such as India and Japan, not all carriers are supporting eSIM technology, thus eventually affecting market growth.

Solution Insights

In 2019, the connectivity services segment held a significant market share, accounting for more than 92.0% and is estimated to expand at a significant CAGR during the forecast period. The connectivity services include the services provided by the MNOs for securely and remotely handling the cellular subscriptions of the end-users. Moreover, the adoption of eSIM for M2M connections is positively affecting the network operators for providing subscription services, thus offering connectivity services has resulted in additional revenue generation for the network operators.

Meanwhile, the hardware segment is projected to witness a substantial CAGR of over 30% over the forecast period. The major growth contributor is the rising adoption in consumer electronic manufacturers. For instance, the growing trend among smartphone manufacturers to integrate eSIM in the device to save space is anticipated to fuel the demand and contribute to the segment growth. 

Application Insights

In 2019, the M2M segment held a significant market share, accounting for more than 68.0% and is estimated to expand at a CAGR exceeding 14.0 % during the forecast period. The M2M application segment is further categorized into automotive, energy and utilities, and others. The growing penetration of the product in the automotive industry for M2M connectivity is bolstering the segment growth. Moreover, connected cars and emergency call systems are the key demand drivers in the automotive industry.

The consumer electronics segment is sub-segmented into smartphones, wearables, and others. The smartphone segment is estimated to expand at a CAGR of over 16.0% from 2020 to 2027. The use of eSIM in smartphones allows device manufacturers to utilize the space in the device as less space is required for the product. Hence, device manufacturers are adopting technology to design comparatively slimmer smartphones. For instance, in 2018, Apple Inc. and Goggle LLP introduced eSIM technology in their smartphones.

Regional Insights

North America held the largest revenue share of over 35% in 2019 and is expected to continue dominating during the forecast period. A strong presence of the network providers and rapid technological advancements are anticipated to contribute to the growth. Europe accounted for a market share in 2019 and is expected to grow at a CAGR of over 13.5% during the forecast period. The presence of major market players such as Giesecke+Devrient Mobile Security GmbH, Gemalto NV, and ARM Holdings, is one of the key factors contributing to the growth. Government regulations for vehicle assistance are further expected to drive regional growth. For instance, in March 2018, the European government implemented eCall regulation, where all the new passenger cars will be equipped with eCall technology. This initiative is expected to further fuel growth.

Asia Pacific is expected to witness the highest CAGR of over 18.5% during the forecast period. Increasing adoption of IoT technology and the demand for embedded connectivity in vehicles from the consumers is expected to drive the market growth. According to GSMA, in 2018, the number of IoT connections in the region accounted for USD 3.5 billion and is expected to reach USD 11.0 billion by 2025. Moreover, increasing adoption of consumer electronics Solutions such as smartphones, wearables, laptops, among others, is further expected to create growth opportunities in the forthcoming years.

Key Companies & Market Share Insights

The market is consolidated and characterized by a high degree of competition among major players such as Giesecke+Devrient Mobile Security GmbH, Gemalto NV, ARM Holdings, KORE Wireless Group Inc., STMicroelectronics. These players are focusing on enhancing their market presence by adopting various strategies such as mergers, acquisitions, and joint ventures or collaborations. These strategies help organizations to expand their business geographically and enhance their solution offerings in different regions. For instance, Qualcomm Technologies, Inc. has integrated Gemalto’s eSIM technology with the Qualcomm Snapdragon mobile PC platform. This integration will offer seamless LTE and 5G connection for consumer application devices.

The industry competition is anticipated to intensify further as a number of companies are focusing on the development of advanced, cost-effective solutions and technologies. For instance, eSIM makes it easier for consumers to change their mobile operators; thus, an increase in the number of consumers switching between network providers will result in intense competition between the network operators. Moreover, the major operating players are investing in R&D in order to offer better solutions. Some of the prominent players in the eSIM market include:

Key players operating in the eSIM market are:

• Infineon Technologies AG

• NXP Semiconductors N.V.

• STMicroelectronics

• Deutsche Telekom AG

• Giesecke+Devrient Mobile Security GmbH

• Gemalto NV

• ARM Holdings

• KORE Wireless Group Inc.

eSIM Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends from 2016 to 2027 in each of the sub-segments. For the purpose of this study, Grand View Research has segmented the global eSIM market report based on solution, application, and region:

• Solution Outlook (Revenue, USD Million, 2016 - 2027)

  • Hardware

  • Connectivity Services

• Application Outlook (Revenue, USD Million, 2016 - 2027)

  • Consumer Electronics

    • Smartphones

    • Wearables

    • Others

  • M2M

    • Automotive

    • Energy & Utilities

    • Others

• Regional Outlook (Revenue, USD Million, 2016 - 2027)

  • North America

    • The U.S.

    • Canada

  • Europe

    • The U.K.

    • Germany

    • France

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa