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Friday, July 22, 2016

New Disruptive Analysis Report & Forecast on eSIM: Pre-Order Discount

I'm in the final stages of preparing a report on the status of the eSIM market, including forecasts for adoption and installed base, out to 2021.  

The report will focus on the use-cases for eSIM, and consider the drivers for, and barriers to, uptake in different sectors, including smartphones and IoT/wearables.

It'll be published in the next week or two after editing is complete, but if you wish to pre-order it, I'm offering a 15% discount, until publication date.

Some preliminary outputs:
  • There are numerous potential use-cases for “remote provisioning” of SIMs with mobile operator “profiles”, especially where the SIM hardware is built-into devices.
  • However despite theoretical benefits, eSIM adoption will have a slow start. 
  • 2016-17 deployment will mostly be early concepts, to allow operators and OEMs to gain experience of eSIM practicalities and refine implementation and processes. 
  • The market will then ramp up in 2019-2021 as cost, industry value-chain and user-experience problems are progressively solved.
  • In smartphones, eSIM adoption will be very gradual, driven by slow maturity of good user-experience of choosing an operator/plan, and the costs of implementation & support vs. device margin. In many ways, eSIM will be aligned with 5G's arrival, not 4G maturity
  • Apple may well be the eSIM king-maker - but will be conservative in adoption, especially in its iPhone flagship, where the near-term risks outweigh any benefits.
  • For many M2M/IoT devices, the eSIM decision is secondary to justifying the extra cost, space and power needs of the cellular radio itself. (As I discussed in February - see link here)
  • There remain unanswered questions about regulation, customer-support and business model for eSIM. Although some projected cost-savings or additional device connections are attractive for operators, it is unclear that OEMs will generate extra revenues quickly & painlessly enough, for them to support the technology in new mainstream devices.
  • eSIM is occurring alongside other technology trends in mobile - SDN/NFV virtualisation, LPWAN & LTE Cat-0/NB-IoT for IoT and so forth. It will need to coexist and be co-developed, which may bring additional complexities.
  • Alongside eSIM, we will also see continued innovation in other areas of SIM technology, both standardised and proprietary. Some use-cases (eg temporary/cheaper roaming subscriptions) can be offered using other approaches such as multi-IMSI MVNOs, or (less securely) early soft-SIM variants
  • Chicken-and-egg problem: until most operators support eSIM, handset vendors will still need removable SIM slots as well, or else produce multiple device variants
  • Definitions of "eSIM" need to be carefully examined. Many people do not understand the nuances and make inaccurate or confused predictions.
  • By 2021, over 500m mobile & IoT devices will ship with embedded, remotely-provisioned SIMs annually, driven mostly by smartphones, although vehicles and tablets show growth earlier
  • By end-2021, the installed base of eSIM-enabled devices will exceed 1 billion - although that is little more than 10% of the overall cellular universe at that time
The report is based on a large amount of primary research undertaken in recent months, among a broad cross-section of service-providers, vendors, industry bodies, regulators, startups and other commentators, as well as many years of analysis of SIM innovation (eg multi-IMSI SIM cards, which I first looked at more than 7 years ago - link). 
It examines both drivers and inhibitors of adoption, from the perspective of MNOs, OEMs and end-users. In particular, it covers a broad set of technical, commercial and regulatory issues that need resolution and experience, before eSIM can become a massmarket offer.

The report will be approximately 35 pages in length, and is aimed at strategy executives, CTOs, CMOs, enterprise architects & planning/operational staff at communications service providers, SIM & network equipment & software vendors, device vendors, investors, regulators, integrators, developers and similar organisations.


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