SIM card market will drop by 0.1 percent in 2019 from 5.53 billion SIM cards shipped in 2018, according to ABI Research.
Removeable SIM card shipments will be reducing from 5.2 billion in 2019 to 5 billion in 2024.
Increase in phone prices will lower SIM card replacement rates in 2019. SIM card market fell in 2018, marking the first global reduction in SIM card shipments in over five years. Market conditions in the Asia Pacific region are also contributing to SIM market.
Research agency IDC said smartphone shipment volumes will see 0.4 percent drop in the second half of 2019. The global smartphone market will drop 2.2 percent in the full year, making 2019 the third straight year of global contraction. IDC expects smartphone shipment market to grow at 1.6 percent in 2020.
Relaxing of roaming fees, which had been a primary driver behind multiple SIM ownership per person in China, has started impacting SIM card market, ABI Research said.
ID registration regulations in Indonesia are impacting SIM card market.
Mobile network operator market consolidation and the end of 4G promotions in India will negatively impact SIM card market.
The marked SIM card reductions in China, Indonesia and India will near offset by increased demand in the supply of eSIMs for hybrid smartphones, most notably within Apple’s range of XR, XS and iPhone 11 and Google’s Pixel range of smartphones.
There will also be continued growth within the M2M/IoT sector thanks to increasing eSIM integration into automobiles.
Gemalto, a Thales company, IDEMIA, G+D, Valid, Samsung, and Infineon are monitoring the success of eSIM and activation rates, looking to understand eSIMs potential impacts on their respective removable SIM card business.
“However, any eSIM impact in the shorter term will be minimal. eSIM should be considered a longer-term market concern, with a reduction in SIM replacement rates driven more in the near term by increasing smartphone prices,” said Phil Sealy, research director at ABI Research.
ABI Research said that the market for removeable SIMs will only marginally be impacted by the eSIM in a forecast period ending 2024, due to a continuation of dual SIM device issuance (encompassing a removable SIM slot and eSIM) and low-level eSIM readiness from an MNO perspective.
Mobile devices are becoming more expensive. Some phones are priced at $1,000 plus mark. Smartphone consumers are looking to spread the cost of a device over a longer period. MNOs are starting to lengthen subscription contracts from the traditional 18 – 24 months period, to 36 – 48 months.
