“Relevant units are being organized to study and promote the application of eSIM technology on tablet computers, portable computers and smartphone devices, and to expand the application of eSIM technology when conditions are ripe.” Recently, the Ministry of Industry and Information Technology (MIIT) talked about eSIM in its reply to a question from netizens, which sparked concern. What exactly is this eSIM, which does not require a slot to be opened and inserted in the phone, but is directly integrated inside the phone? What are the advantages? Will it completely replace SIM cards in the future?
What benefits does eSIM bring?
eSIM is actually an electronic SIM card, a data file that can be downloaded to mobile terminals through the network. With it, various electronic terminals can connect to the internet, receive calls, send text messages, etc., and are functionally the same as a regular SIM card.
Screenshot from the website of the Ministry of Industry and Information Technology
The highly integrated eSIM solution can, first of all, solve the problem of the SIM card slot taking up a lot of space on the phone. Although the Nano SIM card is now very small, the space saved by the card slot can lead to more innovation for the already thin and light mobile phones, where space is at a premium.
The history of the SIM card has been one of constant evolution to “smaller”, from SIM cards to mini SIM cards, to Micro SIM cards, and finally to the now familiar Nano SIM cards, each time with a reduction in size.
A white paper published by China Unicom in 2019 shows that the eSIM solution, integrated into the hardware, takes up 1/3 of the space of a Nano SIM and will evolve to a smaller size.
In addition, the SIM card slot affects the waterproof performance of the phone. The eSIM is integrated inside the phone and does not require a slot in the body, which can improve the waterproof rating of the phone.
The eSIM is easy to replace, with an online application, eliminating the need to go to a physical offline sales office and the hassle of mailing the SIM card. This method has been described by some analysts as “over-the-air card writing”.
In addition, eSIM makes it easy to use dual SIMs. For example, according to an early introduction on Apple’s website, users can install eight or more eSIMs on one iPhone and use two phone numbers at the same time, or even use separate numbers for voice and data.
A research report by a securities company points out that eSIM has the characteristics of low power consumption, high energy-efficiency ratio networking capability, stable operation, strong anti-interference capability, and low cost in IoT applications, and it is expected that eSIM will still be further enhanced in IoT industry applications.
Will eSIM completely replace SIM cards?
Many people may have questions, with so many benefits, will eSIM replace the traditional SIM card? Why is it that after so many years of development, although eSIM is widely used in various IoT devices, it is still slow to take over the mobile phone market?
“The core challenge at the mobile phone end of eSIM is operator interoperability. eSIM can be remotely configured through ‘over-the-air card writing’, allowing for batch opening, flexible change of sign-up and change of operator. However, for operators, the threshold for user switching is lowered and control over users is reduced.” A recent research report issued by Huaxi Securities pointed out.
However, previously, the approval issued by the Ministry of Industry and Information Technology on the three major operators to carry out eSIM technology application services in the Internet of Things and other fields mentioned that effective measures should be taken to ensure the management right of the eSIM platform and the writing right of the eSIM terminal, and other enterprises should not be authorized in any form to open relevant rights and functions.
The reporter notes that some operators are currently pushing super SIM cards, a solution that can integrate security, payment and other functions together to provide a one-card solution. For example, it can act as a school meal card, traffic card, access card, car key, bank U shield, electronic signature, etc.
Fu Liang, an independent telecom analyst, told CNA that eSIM will not completely replace the physical SIM card in a short time, and the super SIM card will not completely replace the traditional SIM card.
There are also views that eSIM is feared to have a huge impact on the mobile phone market. the US version of the iPhone 14 series to be released in 2022 will no longer have a reserved SIM slot and will be replaced by eSIM, which is the first time the iPhone has completely removed the physical card slot from some models. However, Fu Liang believes that Apple will not force iPhones without physical card slots in the Chinese market, after all, the standard is not something that a particular handset manufacturer can decide.
A recent research report released by Huaxi Securities points out that eSIM is developing rapidly in the field of the Internet of Things, but the mobile phone side still needs the cooperation of multiple parties. In particular, as a stock consumer market, eSIM policy promotion on the mobile phone side still requires policy and industry synergy compared to IoT applications.
According to Counterpoint Research, the annual shipments of eSIM devices will reach 6 billion by 2025. Among them, 45% of the eSIM devices will be shipped on the mobile phone side.
