eSIM/iSIM market to exceed 500 million units by 2023

Mobile sim card and network technology concept
Cristina De Luca -

July 28, 2023

The cellular IoT ecosystem, based on 3GPP global standards, is growing rapidly. And it is already starting to accelerate its momentum with the great performance of eSIM/iSIM modules. The IoT eSIM/iSIM market is poised to surpass the 500 million unit mark by 2023, according to projections by IoT Analytics. In the first quarter alone, more than 450 million IoT modules went on to support 16% of the 2.8 billion active cellular IoT connections worldwide.

Analysts believe that eSIMs will become the dominant SIM technology in the next 2-3 years. And that iSIMs will start to gain greater market share because of the enhanced security features it offers. In the long term, it is expected that even the eSIM market will migrate to iSIM technology, with iSIM dominating the market.

Two factors will continue to drive the growth of eSIM and iSIM in the mobile industry: cybersecurity regulations leading to the need for chip-to-cloud security implementation and the recently approved GSMA specifications SGP.31 and SGP.32.

The launch of industry-certified commercial iSIMs, by companies such as Qualcomm and Thales, has the potential to spark a trend towards mass adoption of this new eSIM technology, with research from Kaleido Intelligence suggesting that the iSIM market will grow to 300 million by 2027.

Differences between iSIM and eSIM

iSIM takes all the benefits of eSIM and embeds them into the device processor. Although the eSIM is embedded in the device, it is still a separate processor in the device. An iSIM incorporates the functionality of a SIM card into the device’s system-on-chip (SoC) architecture without a separate processor. Because it does not require physical space for an eSIM chip or removable SIM card, iSIM frees up more space in the design of devices.

Source: Thales

Because an iSIM allows devices to connect to a mobile network without the need for a physical SIM card or eSIM soldered onto a printed circuit board, it enables the creation of much smaller connected devices and sensors than today. They also need much less power than eSIMs, enabling industrial-scale IoT deployments that could become financially and operationally possible.

Many industries are experiencing the benefits of cellular IoT, for example in the consumer electronics, automotive, rail, mining, utilities, healthcare, agriculture, manufacturing, and transport sectors. Almost every sector can be transformed with cellular IoT.

The industry expectation is that iSIM chips will become mainstream in 5 years. SIM cards took 22 years to be mass market. And eSIMs, 12 years.

Because they can be more easily installed in smaller devices such as fitness wristbands and smart watches, as well as M2M devices for IoT applications, eSIM and iSIM are also ideal companions for 5G in 5G-IoT use cases. The opportunities presented by cellular IoT, underpinned by 5G, are abundant. iSIM technology is reducing complexity and costs, and providing the secure foundation that will enable IoT to scale in the 5G wave and later the 6G wave.

Furthermore, “in the 5G-IoT space cost is everything and this is where iSIM excels. Its significant cost difference enables cellular applications that were previously not feasible. It’s a whole new world that we are just beginning to explore,” explains Alex Sinclair, Chief Technology Officer, GSMA.

One of the striking examples of applications of an iSIM in IoT is presented by Vodafone through a promotional video. The telecoms giant envisages smart tags, powered by iSIM, that can be placed on packages to track them throughout the duration of the shipment to monitor the state in which they are sent. In this way, an iSIM can replace traditional solutions like RFID tags. Global logistics providers can track more assets in real time with low-power M2M modules that last for months between charges.