eSIM Market Expands as Mobile Operators Embrace Digital Transformation

The global eSIM market was valued at USD 8.07 billion in 2022 and is anticipated to grow at a compound annual growth rate (CAGR) of 7.9% from 2023 to 2030. This growth is largely attributed to the increased adoption of Internet of Things (IoT) connected devices in machine-to-machine (M2M) applications and consumer electronics. The frequency of eSIM profile downloads has significantly risen across consumer devices, and the market expansion is driven by the growing use of eSIM-connected devices. According to Mobilise, the number of eSIM-enabled devices was 1.2 billion in 2021, with a forecasted increase to 3.4 billion by 2025.

The automotive industry has seen major benefits from integrating eSIM technology, providing flexibility in cellular connectivity for vehicles and enabling new features. Over the coming years, it is expected that nearly all vehicles will be equipped with cellular capabilities, enhancing the driving experience with innovative connected services. The automotive sector has moved towards the next generation of connected vehicles by adopting the GSMA-embedded SIM specification, which aims to strengthen connectivity and security for a variety of in-vehicle connected services.

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eSIM-enabled solutions provide seamless interoperability across different SIM operators, connection platforms, and remote SIM profile provisioning. However, the involvement of multiple network service providers has increased the complexity of maintaining system security. Mobile Network Operators’ (MNOs’) credentials, stored within the eSIM software, may be susceptible to security breaches. Additionally, the use of eSIMs across multiple physical platforms and MNOs raises concerns in virtual environments, potentially undermining the operational flexibility of eSIM technology if security is compromised, which could slow market growth.

Industry 4.0 has introduced a technological transformation featuring smart machinery capable of automatic communication and control. In this networked environment, actionable data flows between devices, from Machine to Machine (M2M) or Machine to Other (M2O), via the Internet of Things (IoT). M2M systems utilize technologies like Wi-Fi, sensors, RFID, and autonomous computing to process data and transfer it for further analysis, often relying on public or cellular networks for connectivity. The integration of eSIM technology within these M2M systems has been a key factor in advancing the connected ecosystem, thereby boosting the market’s growth.

The widespread use of smartphones in countries such as China, India, Japan, and the U.S. is also expected to accelerate market growth. Leading smartphone manufacturers such as Google, Samsung Electronics, Apple, and Motorola Mobility are incorporating eSIM technology into their devices, collaborating with various network providers. For instance, Apple has partnered with six service providers—Ubigi, MTX Connect, Soracom Mobile, GigSky, Redtea Mobile, and Truphone—to offer eSIM services. The increasing adoption of eSIM technology by smartphone and electronics manufacturers enhances user experience, security, and is anticipated to further drive market growth.

Application Insights

The M2M segment accounted for the largest revenue share of 68.1% in 2022, driven by the growing use of eSIM in the automotive industry for M2M communication. Connected cars are a key demand factor within the automotive sector. eSIM implementation simplifies production processes and is expected to foster growth in the connected car market, encouraging the adoption of M2M and IoT technologies across other industries.

The consumer electronics segment is projected to experience the highest CAGR of 9.2% over the forecast period. Consumer electronics continue to be a major force driving innovation and growth across technology sectors. eSIM technology in smartphones allows device manufacturers to optimize space within the device, enabling slimmer designs. eSIM adoption is anticipated to transform consumer electronics applications, as it provides high reliability, improved safety, and enhanced connectivity, making it an appealing technology in the consumer electronics market.

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