October 5, 2017

eSIM In Smartphones: How Does It Work?

Built-in SIM-cards are already used in IoT gadgets and in tablets, but smartphone manufacturers are still wary of the novelty. IHS’s ¹ analysts claim that by 2019 top-3 smartphone manufacturers will start producing their latest models in an eSIM version. However, second and third-tier manufacturers will be pioneers in this field.  According to IHS, the amount of eSIM will increase from 108.9 million in 2016 to 986 million by 2021. So what is the trend? And how does it work?

eSIM In Smartphones - How Does It Work

Built-in eSIM

Today, there’s no smartphone with eSIM, but re-sold gadgets and IoT items are already equipped with built-in SIM-cards. Next, to the market in the eSIM area comes Microsoft. The company in partnership with Gemalto had planned to equip the built-in SIMs into their devices using Windows 10. As a legacy of these unfulfilled plans, there was only an application through which it ‘d be possible to buy Internet traffic. But Microsoft has almost turned away from the mobile market direction. Out of all its lines, the company has left only its Surface tablet-transformer alive.

A built-in SIM-card allows the owner of the smartphone to choose the operator and the tariff plan. However, the device manufacturers already control the range of operators to select from. This means that the manufacturer must begin negotiations with operators from the position of a seller of tariffs. This is a completely different universe in which very different laws operate.

The only example of the large-scale use of eSIM can be in the case of iPad tablets, but Apple did not announce any results of this direction of the business. After all, the worst thing a mobile device manufacturer can do is to quarrel with a telecom operator – this immediately closes a large sales channel, which impacts on financial performance. That’s why no smartphone maker even tried to experiment with eSIM. At the same time, eSIM can find applications in the segment of branded carrier smartphones.

The absence of a SIM card slot assures the operator that the owner of the device will use his services, and will not enter the unlock code and leave for a competitor. However, eSIM today is not so cheap and low-budget device consumers do not prefer them. And the more expensive operators do not release expensive smartphones under their own brand.

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IHS¹ –  https://technology.ihs.com/591806/esim-market-projected-to-increase-nearly-nine-fold-to-almost-one-billion-shipments

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