US and Europe Expand Supply of eSIM-Only iPhone 14
Four Months After Commercialization, Korea Lacks Device and Subscription Incentives
[Asia Economy Reporter Oh Su-yeon] The global eSIM (embedded Subscriber Identity Module) market is projected to grow to a scale of 20 trillion KRW by 2027. In the domestic market, which has been introduced for four months, the spread is slow due to a lack of supported devices and low customer demand. To expand eSIM adoption, the number of eSIM-equipped devices in the market must increase.
Juniper Research forecasted that the eSIM market will grow from about $4.7 billion (approximately 5.7998 trillion KRW) this year to about 20.1142 trillion KRW by 2027. The number of eSIM-enabled devices is also expected to surge, predicted to jump from about 986 million units this year to 3.5 billion units by 2027. Scarlett Woodford, Senior Researcher at Juniper Research, said, "Telecom operators are concerned about the disruptive impact eSIM will have on their existing business models. Nevertheless, if device manufacturers increase eSIM support, operators will face additional pressure."
Unlike traditional physical SIM cards (USIM) that are inserted, eSIM is embedded within smartphones. Users can download carrier profiles via QR codes without needing to visit offline stores or wait for delivery, making activation and related processes more convenient. It also has cost advantages. The cost to download an eSIM profile is 2,750 KRW, cheaper than the 7,700 to 8,800 KRW range for physical SIM cards. When traveling abroad, downloading a local carrier’s eSIM is much cheaper than subscribing to a domestic carrier’s roaming plan. Using both a SIM and an eSIM simultaneously allows one device to use two phone numbers. eSIM was introduced domestically on September 1 last year.
Overseas manufacturers and carriers are actively promoting eSIM expansion. Apple released the iPhone 14 in the U.S. market without a SIM slot, supporting only eSIM. Launching devices exclusively with eSIM offers manufacturers the advantage of lighter devices.
Juniper Research predicts that Apple will supply eSIM-only devices to the European market this year.
As Apple pushes for the spread of eSIM-only devices, other manufacturers are expected to follow this trend. Counterpoint Research reported that as of September 2022, 14 manufacturers had released eSIM-supported smartphones. Samsung Electronics launched 'dual SIM' devices equipped with eSIM starting with the Galaxy Z Fold and Flip4 released in Korea in August last year. The Galaxy S23, to be released in February, will also support eSIM.
U.S. carriers are also actively promoting eSIM adoption. Verizon has offered a service allowing customers with eSIM devices to use 5G for free for 30 days. T-Mobile added an easy eSIM enrollment feature called 'Easy Switch' to its app ahead of the iPhone 14 launch.
However, in Korea, where commercialization has been ongoing for about four months, the spread remains slow. Although specific figures are not disclosed, the telecom industry consensus is that subscriptions are sluggish.
A KT M Mobile official stated, "Due to the iPhone 14 launch and other factors, about 1,000 to 2,000 people subscribed in October, but subscriptions dropped to the low to mid-1,000s in November and December." KT M Mobile, the leading player in the budget phone market, appears to have secured the largest number of eSIM subscribers in the budget phone sector by proactively adopting eSIM.
The telecom industry believes that the lack of eSIM-supported devices is hindering expansion. Although Apple has supported eSIM since the iPhone XS launched in 2018, its market share in Korea was only 13% in Q3 2022, according to Counterpoint Research. Samsung Electronics, which holds an 84% market share, supports eSIM only on its latest devices such as the Galaxy Z Fold and Flip4. Consumers who want to try eSIM cannot use it unless they upgrade to expensive latest devices.
There is also an analysis that there is no incentive to subscribe in the Korean telecom market. In countries with large land areas or slow service expansion where wireless coverage is not fully established, it is difficult to use services smoothly with just one carrier, so both SIM and eSIM are used. This is also true for frequent cross-border travelers. However, in Korea, all three major carriers have LTE coverage of 99.9%, making it sufficient to use just one carrier without needing a secondary line. Industry insiders explain that the slow subscriber growth is because users who previously used two-number services have only switched to eSIM.
However, as Apple plans to release eSIM-only devices in Europe following the U.S., it is expected that eSIM will become the main line in the long term, increasing the number of subscribers.
Juniper Research stated, "Manufacturers like Google and Samsung will develop eSIM-only Android devices to compete with Apple and maintain their position in the global market."
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