Apple Event Analysis: iPhone 14 and iPhone 14 Pro Max to Harness eSIM Technology in US

On Wednesday 7th September, at its annual hardware event, Apple announced that US models of the iPhone 14 and iPhone 14 Pro will use eSIM (embedded SIM) technology, replacing traditional SIM cards in these devices. eSIMs are hardware components that are directly soldered into a compatible device or sensor, instead of a traditional SIM card. eUICC (Embedded Universal Integrated Circuit Card) software enables eSIM modules to remotely switch between operator profiles; allowing increased flexibility and enhanced network coverage.

Juniper Research forecasts that the total number of eSIM modules installed in smartphones will reach 2.9 billion by 2025, with adoption of eSIM frameworks from device manufacturers such as Apple being key to accelerating the growth of eSIMs in consumer devices.

What does this announcement mean for consumers?

eSIM-enabled smartphones will allow consumers to install local profiles when moving outside of their home network; eliminating roaming charges. Using eSIM data plans, subscribers are only required to buy a data plan that covers the country they are travelling to. That is, eSIM technology enables travellers to adopt roaming plans without upfront subscriptions or commitments; using a pay-as-you-go model. Roamers can store multiple eSIMs on a single handset, but only one eSIM can be used at any one time. This makes it easier for travellers passing through different countries to adopt the appropriate data plan. Therefore, Juniper Research anticipates that demand for eSIM-compatible smartphones will increase in tandem with roaming activity, with subscribers favouring simple solutions for international travel.

Juniper Research believes that the combination of 5G connectivity and eSIM compatible smartphones will transform customer experiences, offering faster browsing, download speeds and enhanced connectivity. Moreover, eSIMs allow for reprovisioning, which will make it easier for consumers to switch between network profiles; accessing 5G connectivity where it is available. With Apple offering support for 5G on iPhones in over 70 markets around the world, including support for SA (standalone) networks, Juniper Research anticipates that the company is primed to capitalise on the growth of 5G roaming.

What does this announcement mean for network operators?

The aforementioned reduction in roaming charges will have a significant impact on operators, who work within tight profit margins. In response, service providers will look to recover this cost by reducing the price of smartphone contracts. Through competitive pricing, operators will look to expand their market share by making smartphone ownership more accessible to subscribers. A failure to provide affordable contracts will lead to customer attrition, with eSIM technology making it easier for consumers to switch between network profiles.

What does this announcement mean for Apple and other smartphone manufacturers?

For smartphone manufacturers like Apple, eSIMs enable the production of smaller devices, as there is no longer a need to accommodate a SIM card and the accompanying SIM card tray. This will reduce the cost of smartphone production which, when translated to handset pricing, will make eSIM-compatible smartphones more accessible than smartphones with traditional SIM cards.

Juniper Research anticipates that Apple’s production of eSIM-enabled iPhones will ultimately increase its revenue from devices, as reducing the price of smartphones will make them more accessible to consumers. That is, mobile subscribers that were previously unable to afford an iPhone will emerge as a new addressable consumer base. It is important to note that the value of eSIM technology is dependent on the number of vendors that adopt it. That is, if vendor adoption accelerates, the value of eSIMs will become greater. Once this occurs, additional pressure will be placed on operators to support the standard in order to avoid customer attrition.

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Our latest eSIM whitepaper,?Unlocking the Potential of Consumer eSIMs, provides a market outlook for eSIM adoption in the consumer sector and analyses sector demand for eSIM technology. It also includes a summary of our forecast for the total number of eSIM modules installed in connected consumer devices in 2025.

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Juniper Research provides analyst reports, consultancy services, and industry commentary to the biggest players in the digital technology space. For more insights on eSIMs and other high-growth market sectors, visit our website.