Strong expansion of many key markets, combined with regulatory, economic and inventory challenges in China, result in 2% total SIM market growth
The SIMalliance membership, which represents approximately 88% of the global SIM market, has reported 2015 SIMalliance shipment volumes equalling 4.7 billion, reflecting a 0.3% increase on 2014 shipments.
The estimated total available market in 2015 was 5.3 billion, compared to 5.2 billion in 2014, marking a 2% increase in total SIM shipments worldwide.
Significant advances were reported by SIMalliance members in key markets and regions, notably, the Americas (up 6%), Europe (up 1%), India (up 25%), Japan and Korea (up 12.5%) and the Middle East and Africa (MEA) (up 14%).
Total shipment figures, however, were impacted by a contraction within the Chinese market. This was caused by a number of factors. In 2014, unusually high demand within China for cards to be utilised in LTE networks led to exceptionally large shipment volumes. Many of these were carried forward as 2015 stock. Also, in 2015, the Chinese government accelerated identity confirmation following the introduction of regulation in 2013 which mandates that SIM cards must be registered with genuine identities. And finally, the macroeconomic environment contributed; in 2015, China reported its slowest growth in 25 years.
Elsewhere in Asia however, strong growth was evident, with both the Indian and Japanese and Korean markets performing well. India, which now has the highest shipment volumes in Asia as reported by SIMalliance members, saw a 25% year on year market increase, as shipped units jumped from 653 million units in 2014 to 816 million in 2015. This level of growth signals a recovery from a regulation-induced decline in 2013, as SIM shipments return to stable market levels.
Volumes in Japan and Korea grew by 12.5% to 64 million. This continues to be a technically progressive market, with persistent demand for advanced SIM technologies, such as LTE, NFC, nano SIMs and M2M SIMs.
In the Americas, shipments jumped 6% from 738 million units in 2014 to 781 million in 2015. Growth in this region, particularly in South America, is largely attributed to the continued roll out of 4G networks and the ongoing migration to LTE cards, which currently shows no signs of slowing.
A 14% market increase in MEA, where year on year shipments rose from 861 million to 982 million units, demonstrates the strong growth potential of this market. Growth is due to three factors: the ongoing penetration of smartphones, which is seen particularly in emerging markets thanks to more affordable smartphone models leading consumers to upgrade from feature phones; continued subscriber acquisition; and a sharp rise in LTE card shipments, as 4G networks start rolling out across African markets.
The return to growth (1%) in Europe (440 million to 444 million units) has been welcomed by SIMalliance as an indicator of market stability, particularly since no major SIM technology migration was undertaken in 2015.
On a global scale, the biggest technology driver of SIM market growth in 2015 was the continued migration to 4G networks, leading to every market in every region reporting, at minimum, double digit growth in LTE card shipments.
Globally, an exceptional 88.5% growth in shipments of cards that can be used in LTE networks was observed, driving volumes of this type of SIM to exceed one billion units for the first time. Greater China (380 million units) remained the largest LTE SIM card market in 2015. North America (161 million units) retained its place as the second largest market, followed by South America (113 million units), Brazil (64 million) and India (62 million). In China and India, LTE cards shipped were localised solutions based on regional standards.
The cessation of Softcard in the US in 2015 impacted significantly on near field communication (NFC)-enabled SIM shipment volumes in the region throughout the year, resulting in a decline for North America shipments. NFC SIM growth was seen, however, across Asia (16% to 68.7 million units) and Europe (25% to 32.8 million units) among other markets, generating a total increase in shipments of 20 million units outside of the Americas. Despite these increases, the influence of activities in the US led to a static global picture for NFC-enabled SIMs.
As in previous years, Europe contributed heavily to a 48% increase in the number of shipments of embedded SIMs (soldered) designed specifically for machine to machine (M2M) applications. Volumes also rose significantly in Japan and Korea, an early-adopter market, where M2M services are well established. This could signal a further potential growth opportunity for embedded SIMs, as other markets follow and expand M2M deployments across sectors such as automotive, and energy plus utilities.
As expected, the nano-SIM market (including Triple SIMs as reported by SIMalliance members) performed well throughout 2015 as demand continued to increase for smaller SIMs for use in the latest smartphone models. Year on year volumes were up by 194% and this category now comprises 26% of all SIM shipments, up from 9% in 2014. While every market in every region increased its nano SIM category volumes in 2015, the largest markets, respectively, were Western Europe, China, North and South America. 2015 was the first year that 2FF SIM shipments did not dominate the market.
Herve Pierre, SIMalliance chairman, commented: “The trend for many key SIM markets in 2015 was expansion. Despite economic and regulatory challenges within the Chinese market, total market shipments still grew by a healthy 2%, or 100 million units across the year. Outside of China, SIMallance shipments grew by 7% across all other markets, indicating the strength of other regional markets. This is largely attributable to the ongoing penetration of smartphones in emerging markets and the continued roll out of 4G and the subsequent demand for LTE cards, which has been a very positive technology migration success story this year. With shipments of cards destined for LTE networks reaching one billion units for the first time in 2015, migration is now in full swing across all regions of the world and it is expected to continue apace.
“Looking ahead to 2016, a key priority for the industry is to continue evolving and adapting SIM technologies in line with changing market requirements and, with this in mind, SIMalliance is actively promoting innovation,” continued Pierre. “The association is already leading cross-industry efforts to define security requirements within 5G. From our initial findings, it appears that there could be a role for dedicated tamper-resistant hardware across the four segments identified for 5G: massive IoT, critical communications, enhanced mobile broadband and network operations. We are currently engaging with other 5G stakeholders to fine tune our vision of the role hardware based device security will play in protecting 5G networks and the many new services which will be deployed across segments.”
He added that the SIMalliance is also actively engaged in standardisation efforts for M2M deployments. “While embedded UICC technology in M2M deployments, such as smart meters and vending machines, is established and mature in some markets, we are aware of potential opportunities for its application within connected consumer devices, specifically across segments where there are high security requirements, such as automotives and wearables,” he said, concluding, “As part of its roadmap, SIMalliance will soon start to adapt its technology to address the requirements of subscription management for eUICCs within connected consumer devices.”