In a recent study by ABI Research, it is expected that over 225 million eSIM enabled handsets will reach consumers by the end of 2020.

While physical SIM card slots are likely to remain in place for the time-being, eSIM technology is rapidly developing and may, one day, remove the need for a SIM card altogether.

2020 has been a hotly anticipated year for the mobile technology industry. Alongside Huawei’s release of the P40 handset, Samsung’s launch of the S20 series has catapulted eSIM technology into the hands of consumers worldwide.

While those in-the-know are likely to be thrilled, the majority of consumers are still in the dark about this transformative technology.

So, what is eSIM? eSIM, or embedded SIM, is a virtual SIM card slot that lives within a device. Fitted during manufacturing, the small chip (eSIM) can connect to mobile and data services and performs the same function as a regular SIM card.

Yet, there are many differences between eSIM and SIM cards, each providing a number of benefits and drawbacks to consumers and the industry alike.

Ability to switch between multiple network operators

The biggest significant change between a physical SIM card and an eSIM is the ability to switch between multiple network operators and profiles at the drop of a hat. Currently, a consumer will have to purchase a physical SIM card connected to a mobile network operator (Vodafone or Verizon, for example) in order to access mobile network services.

If they wish to change their mobile network operator, they would have to remove their SIM card and purchase another SIM card from a different operator. This is not the case for eSIM.

 The eSIM chip comes fitted inside the device, which can then be activated (as many times as desired) with a profile – or eSIM plan – that is downloaded over the internet.

Similarly to how you can download an eBook to your eBook reader, you can download your mobile service to the eSIM embedded inside your handset. If you wish to change your plan, you simply download a new plan from a different operator which will overwrite your eSIM.

This has enormous benefits for consumers as they are no longer tied to one mobile plan and are free to pick and choose their mobile network operator (providing the operator supports eSIM).

This can result in significantly reduced roaming charges as an eSIM can be used to pick up local networks while overseas, and can provide better coverage in your home area as you can choose which network provider to use.

However, the ability to switch between mobile network operators seamlessly has undoubtedly caused a stir in the mobile industry. Traditional revenue channels for mobile network operators – such as roaming charges and in-store purchases of mobile service plans – will decline. As eSIM popularity rises, industry giants will have to find new methods for engaging both SIM cards and embedded SIM users.

Size and space

Since the early nineties, the SIM card has evolved rapidly. In 1996, the Mini SIM was launched; measuring 25mm x 15mm. Seven years later, the micro SIM was developed. At 15 x 12mm, it was later used by the iPhone 4, iPad, iPhone 4S, Motorola RAZR and the Nokia Lumia 800. The Nano SIM came next, even smaller than its predecessors at 12.3 x 8.8mm. And now, the eSIM – at less than 2mm-squared, it is not only the smallest SIM, but the first to be embedded inside a device.

Across the years, shrinking SIM cards have allowed for smaller devices, as well as additional space within a device for new technology. With a rise in eSIM adoption, it is possible that the regular SIM card slot may soon become defunct, generating a lot of additional space within a device for manufacturers to innovate.

Motorola has already taken this step of removing the physical SIM card slot, although an eSIM study from the GSMA indicated it may be a few years before the physical SIM card is truly made redundant.
 
eSIM cannot be removed

Unlike physical SIM cards, an eSIM cannot be removed from a device once it has been embedded by the manufacturer as it can be remotely provisioned (activated without physically changing any of its components).

While this can cause a few challenges for consumers, including the inability to transfer SIM data from one device to another, there is no risk of losing the SIM card. Further, a device fitted with an eSIM can be a deterrent for theft. In most cases, vendors of stolen handsets are required to remove the physical SIM card prior to the sale for fear of receiving phone calls or having the device’s location traced. A stolen device with an eSIM will be harder to resell and easier to trace.

In a recent study by ABI Research, it is expected that over 225 million eSIM enabled handsets will reach consumers by the end of 2020. While physical SIM card slots are likely to remain in place for the time-being, eSIM technology is rapidly developing and may, one day, remove the need for a SIM card altogether.