SIM card shipments set to decline further - Mobile World Live

SIM card shipments set to decline further

01 OCT 2019

Increased prices of mobile phones will contribute to the further decline of SIM card shipments, more so than eSIM adoption, ABI Research stated.

Phil Sealy, research director at ABI Research, said: “The greater threat for the removable SIM card form factor in the shorter term is being presented by the handsets market. Mobile devices are becoming increasingly more expensive, some of which are now above the $1,000 mark.

“As a result, consumers are looking to spread the cost of a device over a longer period. MNOs have also taken note and are beginning to lengthen subscription contracts from the traditional 18 and 24-month period, to 36 and 48 months. The increase in device life and contract lengths will reduce replacement rates and thus SIM card demand”.

SIM card shipments dipped for the first time in five years in 2018 when 5.53 billion modules were shipped. ABI Research predicted shipments would fall to 5.2 billion this year and 5 billion in 2024.

The broader SIM market faced challenges in APAC since 2018. In China, roaming fees were relaxed, which was the primary drive behind multiple SIM ownership. In Indonesia, ID card registration regulations were enforced, while adoption in India dropped due to operator consolidation and the end of 4G promotions.

Replacement rates were tipped to be hit by increased demand for eSIMs from smartphones including the iPhone XR, XS, 11 and Google Pixel range. Continued growth is expected in M2M and IoT due to increasing eSIM integrations into automobiles.

But Sealy said any eSIM impact on the market in the shorter term will be minimal. “The 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.”

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Manny Pham

Manny joined Mobile World Live in September 2019 as a reporter based in London. He has previous experience in telecoms having worked for B2B publication Mobile News for three years where he climbed up to the position of Features Editor....

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