Over 4.3bn SIM cards are set to ship this year, down 8.5% as a result of the continuing chip shortage.
The data from ABI Research predicts that risks will remain through 2023, compounded by a possible recession. Although the SIM card market may start to recover from the chip shortage crisis, significant limitations to growth should be expected, driven by inflation, increased cost of living, and subsequent reduction in consumer spending power.
The consumer market will be the worst hit area of the SIM cards market and previous 2023 growth expectations of 7.2% have now been reduced to 1.8% to reflect the evolving macroeconomic trends.
“How best to deal with, not only existing, but new and increasing post-COVID-19 challenges remains a significant SIM card ecosystem pain point,” said Phil Sealy, Digital Security Research Director at ABI Research. The industry is questioning where to place emphasis and how to best navigate what can only be described as a perfect geopolitical and economic storm.”
“On top of these challenges is the anticipated impact of the first eSIM-only Apple smartphone devices, launching in the fall of 2022. Although Apple will initially limit deployment of its Apple 14 eSIM-only devices to the United States, it clearly outlines Apple’s intentions for an eSIM-only handset portfolio. The impact on the U.S. market as it relates to removeable SIM card supply will be clear and more evident in 2023, the first full year of Apple’s eSIM-only device shipments into the region,” Sealy says.
The US eSIM-only smartphone device launch is a significant industry milestone. Given the shift from removable SIM for-factor to eSIM, it is likely that removable SIM card supply in the United States will be reduced by approximately 50 to 60 million in 2023.
“If proven successful, Apple will likely look to expand its eSIM-only smartphone range into other regions, with launches in mature Western European or APAC countries, potentially as early as 4Q 2023. Apple has now made its objective clear: it will eventually migrate all its devices to eSIM-only variants and subsequently carriers will need to prepare and start embracing the eSIM for consumer applications and begin adopting an eSIM first activation policy where applicable.”
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