Feature Article

January 24, 2013

4G, NFC, Security, New Form Factors, and Connected Consumer Devices: Key Drivers for SIM Card Market Growth

When was the last time anyone actually thought about a SIM card? Aside from old school thoughts that if you were a Verizon Wireless customer you didn't need one and it was harder to switch mobile phones, and that if you were an AT&T Wireless customer you needed one but it made it easier to switch mobile phones and keep some contacts intact, no one really thinks about SIM cards.

Nevertheless, there is, in fact, a real SIM card market, and there are some serious numbers attached to this market. And, if this is the case, there will be research firms that track and assess the technology trends affecting it. Hence, ABI Research's new SIM Card Market Data report, which is produced under the company's SIM Cards Research Service.

SIM Card growth has slowed for the simple reason that the markets that have driven growth are near a saturation point, especially as SIM cards become increasingly pervasive across different network technologies. That said, ABI notes that there are areas of growth that remain as new applications, form factors and an increasing breadth of connected products emerge. 

Due to these factors, ABI now projects in its new report that SIM card annual shipments will very likely rise in 2013 by at least 5 percent to approximately 5.5 billion units. Related market value is projected to grow to $2.3 billion this year. That growth is smaller than it was in 2012, when the market grew 8 percent.

ABI says that the market will now place emphasis extracting maximum value from the 6.3 billion cards in circulation. These cards will increase to 7.5 billion, but emphasis remains n extracting maximum value. In addition, ABI's research points out that 4G rollouts, NFC, and solutions offering more advanced security for payments, DRM, authentication, and encryption will all see higher end SIM cards shipping over the next few years.

John Devlin, ABI's security and ID practice director, notes that, “Following shipment growth in 2012 of eight percent, this is the first time that the SIM card market has had two consecutive years of single-digit growth. There is clearly a growing emphasis from leading vendors on new developments to grow their SIM card businesses. The problem is that this is a limited market, and highlighting this fact is that, even down the road in 2017, over half of SIM Card shipments will still be for use on 2G networks.”

Even so, ABI points out that new form factors and the growing need for data connectivity in consumer electronics and M2M devices will provide some respite to this generally slowing market. In addition, 3G and 4G will grow from 19 to 42 percent. The end result of these advances is that high-end SIMs -- that is, those 512 KB and above -- will account for a third of SIMs shipping by 2017.

Edited by Rich Steeves

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