Chip shortage has been one of the biggest issues in a lot of industries since the health crisis started. And it looks like it’s not ending soon as experts say that it could get worse this 2022, which is said to be the “critical chip shortage year”.
It’s about to get worse that even the SIM cards supply this year might also be at risk. As per ABI Research, there could be a decline in SIM card shipment this year with an expected total of 3.93 billion, versus last year’s 4.36 billion.
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While it could be a big issue this 2022, the firm is quite optimistic that it’s just a “shorter-term market challenge” that could possibly be improved in 2023 as chip production capacity bounces back.
Still, ABI Research doesn’t see the removable SIM card form-factor shipments to be back to what it was pre-COVID. The reason is not the health crisis itself, but the fact that SIM card replacement rates have been experiencing a continued decline. Plus, technologies like eSIM are gaining some steam.
The current mobile phone market is also presenting a bigger long-term threat for the removable SIM card module.
“In addition, smartphone average selling prices are at significantly higher levels than a few years ago, subsequently negatively affecting removable SIM card churn rates as device contracts are lengthened to spread the cost of higher priced smartphones over a longer period of time.” says Phil Sealy, ABI Research Telco Cybersecurity Research director.
“Overall, ABI Research believes that the market for removable SIMs will only marginally be touched by the eSIM over the next two years, due to a continuation of dual SIM device issuance (encompassing a removable SIM slot and eSIM). However, with strong rumors circulating around the launch of an eSIM only Apple device, a higher level of impact should be expected from 2023/2024 onwards.” the firm said.
These findings are part of ABI Research’s SIM cards market data report.