IHS: SIM card shipments to reach 5.6 billion by 2020

IHS: SIM card shipments to reach 5.6 billion by 2020

IHS: SIM card shipments to reach 5.6 billion by 2020

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IHS Technology, a technology market intelligence company, says the number of SIM cards shipped globally is expected to increase from 5.4 billion in 2015 to 5.6 billion in 2020.

According to Don Tait, Senior Analyst, IHS Technology, “there is an interesting move toward wearable devices as companions to smartphones and other mobile devices, such as smartwatches, health bands, glasses and smart clothes, which present a growth area for smart-card suppliers and mobile network operators.”

According to IHS, “the rising number of these devices in the market is an opportunity for operators and card suppliers to increase SIM penetration for both pluggable and embedded form factors.”

Ian Weightman, Vice President, Technology, IHS Technology.

Wearable devices with SIM cards incorporated into them have the potential to increase mobile network operator (MNO) subscribers, leading to more addressable devices for SIM management and increased revenue streams, IHS says.

According to the IHS Digital Security Intelligence Service, companion devices are expected to spur growth in the SIM card market from 2015 to 2020.

Apart from Apple, most other handset suppliers are more dependent on MNOs when it comes to sales channels as they represent 60 percent of the sales channels utilised by handset manufacturers.

“Handset suppliers need to be mindful of any changes in this business model. In contrast, Apple has its own retail outlets and can sell a major percentage of its products through the company’s Apple Stores”, Tait adds.

Sales channels and products are expected to evolve and change from 2015 to 2020 as Apple, Samsung and other companies change their business dynamics and models.

IHS projects that “the traditional SIM card market is not likely to implode any time soon, because there are still a lot of legacy solutions that need to be catered to; however, if and when manufacturers start changing their business models, we can expect a greater impact on the market.”

The replacement rate of new handsets according to IHS is much lower than the replacement rate of SIM cards. Should the market move toward an embedded model, the replacement rate of SIMs would trend toward that of handsets; reducing the SIM card market size.

However, during the initial introduction of eSIM cards in handsets, companies are more likely to follow a dual SIM strategy (i.e. having an eSIM and a removable SIM card in a smartphone).

IHS further explains that including an eSIM and a removable SIM card in a smartphone is a way for companies to test the market, similar to what was done with the advent of mobile payments.

At the time, it was not clear if the SIM or the embedded secure element would be the solution of choice for mobile payments, so Samsung and other OEMs went all-in with a dual strategy and offered both solutions.

“This strategy demonstrates the opportunities that arise with targeting the largest total available market possible and not to vex potential customers with a strategy that is too rigid. The SIM card industry will follow a dual SIM strategy.” Tait adds.

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Donatus Anichukwueze Technology Journalist at Technology Times Media Phone No: 08074016066 e-mail: donatus.anichukwueze@technologytimes.ng