Apple is preparing to close the chapter on traditional SIM cards permanently. Information emerging from the tech industry suggests that the iPhone 17 will be the last generation of Apple smartphones to include a physical SIM card slot. Starting with the models launched next year, the Cupertino-based company is expected to rely exclusively on eSIM technology, regardless of the region.

This decision comes three years after the iPhone 14 series already ditched classic SIM cards in the United States market. The initial plan was to implement this change globally earlier, but many carriers were not ready for the full transition. Thus, Apple has retained the option of a classic slot up to the iPhone 17.

Why Apple Wants to Eliminate the Physical SIM

The move away from the physical SIM card could bring several notable advantages. The freed-up space inside the phone can be used for a larger battery or an improved heat dissipation system. Additionally, the absence of the slot contributes to better water and dust resistance, a direction in which Apple has consistently invested in recent years.

However, eSIMs are not without their issues. Activation and migration between devices remain a complex process, and in case of a malfunction, users are forced to visit physical carrier stores to reinstall the profile.

Market Signals

Sector Impacts and Opportunities: The global eSIM market is experiencing rapid growth. By 2027, it's projected that 80% of the global smartphone installed base will be eSIM-capable. This trend is compelling telecom operators (MNOs) to accelerate their digital transformation strategies.
Competitor Positioning: Other major manufacturers like Samsung and Google have also integrated eSIM technology into their devices, indicating a broader industry trend.
Impact on SIM Card Manufacturers: Companies focused on manufacturing physical SIM cards face a declining market. However, many are pivoting to produce the eUICC chips used in eSIMs.

Winners & Losers

Winners: Device manufacturers (Apple, Samsung, Google) gain design flexibility and cost reductions. eSIM technology providers benefit from increased demand. Consumers enjoy greater convenience. Losers: Physical SIM card manufacturers face a declining market. Unprepared mobile network operators risk customer churn.

Action Timeline

Immediate: Opportunity for eSIM providers to partner with MNOs seeking to offer seamless eSIM experiences.
Short-term: MNOs should develop user-friendly mobile apps and digital platforms for eSIM activation and plan management.
Long-term: Global eSIM adoption will lead to structural changes in how customer digital identity is managed and services are accessed.

Risk Assessment

Regulatory Risks: Variations in national regulations for eSIM deployment could pose challenges.
Carrier Unpreparedness: Some operators may struggle with the technical and operational shifts required to support eSIM.
Consumer Education Gap: A lack of consumer understanding about eSIM benefits and activation processes can slow adoption.

Key Indicators

Signal for the Market: The shift to eSIM indicates progress towards device simplification and enhanced digital user experiences.
Data: 80% of the global smartphone installed base is projected to be eSIM-capable by 2027.

Regional Perspective

Apple is adopting a dual-path approach, offering eSIM-only models in markets like the US and Europe, while retaining physical SIM trays in regions where carrier infrastructure or consumer habits lag behind.

Immediate Implications

What Happens Next: eSIM adoption is expected to accelerate globally as Apple gradually removes physical SIM slots.
Time-Sensitive Opportunities or Risks: There's an opportunity for eSIM solution providers to establish themselves as key partners for MNOs needing to update their digital infrastructure.

What to Watch

Leading Indicators: Monitor Apple's rollout of eSIM-only iPhone models in new regions.
Expected Next Developments: Competitor responses to greater eSIM integration; an increase in the number of mobile operators supporting eSIM via digital channels.
Key Decision Points: The readiness of MNOs to offer seamless digital eSIM experiences to consumers.

Analysis

The shift to eSIM is an inevitable evolution in mobile connectivity, driven by technological advancements and consumer demand for seamless digital experiences. Proactive adaptation and strategic planning will be key for all stakeholders to thrive in this evolving landscape.