is undoubtedly underestimated for the launch of an iPhone phone that only supports eSIM in the US market, from the negative evaluation of industry media.
Although eSIM is no longer an innovative technology at the moment - Apple introduced eSIM to Apple Watch 3 in 2017, supporting sharing phone numbers with iPhone , thus promoting the sales of smart wearable devices. However, due to the inadequate market publicity of operators, mobile phone users do not have sufficient understanding and understanding of eSIM. According to research conducted by GSMA in eight countries including the United States, Germany, and Japan, less than 30% of consumers understand eSIM.
Therefore, the American version of iPhone 14, which only supports eSIM, came out of nowhere. For users who are used to plugging and unplugging cards on their mobile phones, it brings more freshness and doubts, and lacks sufficient understanding of the impact of eSIM on the communication industry's personal experience, communication operations, and mobile phone manufacturing in the present and future.
For individuals, eSIM is a "new ticket" that realizes freedom of network selection
In the early stages of the development of mobile communications, the operator's phone number was tied to the mobile terminal, and one code can only be used for one machine, so the mobile terminal can only be sold through the operator channel; until the pluggable SIM card appears, users have the freedom to replace mobile phones at will, and mobile phone sales have been expanded to more channels outside the operator's business hall, including mobile phone brand direct stores, franchise stores, agency stores, and even "Huaqiangbei" and online, which has promoted the great development of the mobile communication service industry and mobile phone production and manufacturing industry.
However, SIM cards that liberate the mobile phone industry are still in the hands of operators and have become an important tool for them to bind mobile phone users. Users must apply for SIM cards from the operator and activate them in the card slot of the mobile phone to use the operator's network services; if users want to use the network services of multiple operators, they need to apply for multiple SIM cards, but the current mobile phone only has two card slots at most. Therefore, in theory, if users want to use the network services of the third operator, they need to remove and replace the original SIM card from the mobile phone. This undoubtedly creates obstacles for users to choose the freedom of the network.
Although it is not common for users to choose multiple operator networks in real life, for users who travel across borders, the need to choose the best network service among operators to avoid high international roaming fees is rigid; even if they do not go abroad, when the operating operator network is in poor condition at a certain time or location, or are not satisfied with its service quality, the user is undoubtedly willing to conveniently switch to another operator network.
For a long time, the main obstacle to users' freedom of network selection has been due to their dependence on phone numbers bound to physical SIMs. If you change the network, you have to change the number, which will bring a series of subsequent operations for changes in external contact information. Even if you can transfer the network with a number, you still need to handle various processes between different operators, which greatly increases the cost and concerns of users to achieve freedom of network selection.
However, the emergence of smartphones has created the development and prosperity of mobile Internet business. Dialing voice calls is no longer the main application of smartphones. Life connections between family and friends, and even business connections between colleagues and customers are more carried out through social software and Internet applications such as WeChat , WhatsApp, Facetime. As a result, digital identities such as Internet accounts, email addresses, and Apple IDs have gradually replaced phone numbers and become more important identity identification information in the mobile Internet era.
Therefore, for mobile phone users, getting rid of the concern that changing phone numbers will affect external contact and choosing operators' services based entirely on factors such as network signals, tariff levels, service quality, etc., has met the actual conditions, and eSIM provides technical guarantees for users to facilitate switching between multiple operator networks.
Take the American version of iPhone 14 with the physical SIM card slot as an example. After booting up, users can select the operator's eSIM activation according to the built-in operation instructions of the iPhone, and use the operator's digitally allocated eSIM to activate network access; they can also choose eSIM quickly transfer and transfer the phone number from the old iPhone to the new iPhone by themselves without contacting the operator; they can also scan the QR code provided by the operator or use the operator APP for eSIM registration and activation operations.
All these operations can be completed online by mobile phone users. They do not need to go to the operator's business premises, and do not need to wait for the operator to mail the physical SIM card. They can easily choose the operator independently, realize remote authentication, number activation and access to the network through eSIM.
, especially for mobile phone users who travel abroad, eSIM can not only avoid the trouble of purchasing, changing cards, or losing cards in other places, but also provide more convenient options to save international roaming costs. For example, mobile phone users can purchase prepaid eSIM numbers on the website or APP of the operator's visit, and after remote registration and activation, they can enjoy more economical local data, voice and SMS packages; they can also purchase prepaid data eSIM from virtual operators that support global communication services, and access the Internet on mobile phones at more preferential rates.
US version of iPhone 14 supports the use of two eSIMs at the same time. For users who care about number changes, they can also set the commonly used number eSIM in their place of residence as the main number to ensure that contact with phone numbers will not be interrupted. Other eSIMs are used for data traffic services that are insensitive to phone numbers or preferential prepaid package services at the place of visit, so as to enjoy the services provided by more satisfactory and more preferential operators.
US version of iPhone 14 can store 8 or more eSIMs. Users can switch the active eSIM to other stored eSIMs anytime and anywhere, greatly facilitating users' convenience of freely choosing operators and flexibly switching networks. Therefore, to a certain extent, Apple's release of the iPhone 14, which completely abolished the physical SIM, in the United States, completely handing over the autonomy of choosing to access the network to users.
This will inevitably trigger fierce market competition among operators to compete for users. Therefore, users do not have to worry about the increase in tariff expenditures using the eSIM numbers of two operators at the same time. I believe that as the market competition intensifies, a more reasonable tariff plan that adapts to multiple eSIMs will appear.
For operators, eSIM is both a challenge and an opportunity
eSIM provides technical guarantees for mobile phone users to conveniently switch operator networks, and in turn brings huge challenges to operators maintaining existing network users and reducing churn.
, especially for operators that use the scale of existing users to build a "moat" of market advantages, the reduction of network transfer threshold brought by eSIM leads to a decrease in its control over users. To avoid the convenience of existing users with the help of eSIM, competitive advantages can only be ensured by improving network performance and reducing the fee level; in addition, in order to support eSIM, operators also need to transform existing business processes, invest in the construction of an eSIM authentication management platform that complies with 3GPP specifications, and additional investment in training customer service personnel.
Therefore, the increase in customer retention difficulty and additional investment costs caused by eSIM will have an adverse impact on the operator's profitability, which is also the reason why operators' unpositive publicity and promotion of eSIM. Some operators even passively resist eSIM under the pretext of the insufficiency of using eSIM to open a card in the air and remote activation, and the impact of online registration on real-name regulation, and deliberately conceal the eSIM specifications from users and the market are formulated by GSMA, the world's largest communications industry organization. Its security is guaranteed by strict standards, and its implementability has been widely verified in the widespread application of the Internet of Things field.
However, for operators who want to catch up in the user market, the opportunities brought by eSIM are far greater than challenges. The popularity of eSIM will inevitably significantly reduce the difficulty of obtaining network transfer users from competitors.
, the third mobile operator in the US market, is very eager to seize this opportunity. On the eve of Apple's iPhone 14 press conference, T-Mobile announced an upgrade plan for free testing: all non-T-Mobile users, as long as they have mobile phones that support eSIM, can directly apply for eSIM through the official T-Mobile APP, and try T-Mobile's 5G network for free for 3 months; while users retain the original operator's number and network access, they can also compare the indicators of the original network and T-Mobile network through the network score card on the APP; after the 3-month test period ends, users can decide whether to pay to continue using T-Mobile's network.
With the advantages of medium and low frequency spectrum, T-Mobile claims that the built 5G network exceeds its competitor Verizon in terms of coverage, and is twice as fast as its competitor ATT in terms of network speed, and ranks first in the evaluation of many three-party network test companies. Therefore, T-Mobile is very confident to grab more 5G users from competitors through free testing activities, and eSIM, which facilitates users to switch to the network, has become an important tool and means for T-Mobile to achieve its goals.
In order to counter the competitive offensive of T-Mobile, Verizon and ATT, the largest and second largest operators in the United States, also provide additional tariff discounts and eSIM support for transferring users from different networks in the "Bring Your Own Decice" plan, and also hope to attract transfer users with the convenience of eSIM. Although
eSIM will intensify the competition among operators for users, it can also help operators save on the expenses of purchasing, storing and delivering physical SIM cards; and with the popularity of eSIM, more and more mobile phone manufacturers will follow Apple to produce mobile phones that cancel physical cards, and more and more users will be accustomed to using eSIM for remote card opening and number activation, helping operators to achieve the thorough digitalization and onlineization of user business processes, which will also compress the number and related costs of physical business premises.
No matter what the operator's wishes, as the global standards and specifications of consumer eSIM are widely recognized, the eSIM management platform has begun to be widely used, and eSIM has achieved good development momentum around the world. According to the GSMA report, as of June 2022, more than 260 operators (including virtual operators) around the world have launched eSIM services using smartphones; with the US version of iPhone 14 completely canceling the physical SIM card slot, I believe that Apple's leading role will prompt full support of eSIM to gradually become the mainstream trend in the mobile phone market.
Therefore, for operators, instead of resisting the challenge of user loss, it is better to take the initiative to discover and seize opportunities from the benefits brought by eSIM to users as soon as possible, so as to seize the initiative in the inevitable market competition. Especially in a fully competitive market, whoever supports eSIM first will win the sought after by young users who are keen on new things. For example, Norwegian communications operator ICE has specially set up a digital sub-brand that fully supports eSIM to promote the contribution of eSIM to reduce plastic use and carbon dioxide emissions. Combined with a fully digital self-service system, it creates the image of a green and environmentally friendly operator and is popular among young consumers in the local Norwegian market.
For Apple, eSIM is not just a simple way to save card slot space
fully supports eSIM, completely canceling physical SIM card slots. The most direct benefit to mobile phone manufacturers is to save the internal space of the mobile phone, reduce production and design costs, and also help improve the performance of mobile phones' waterproof level and other devices.
But for Apple, eSIM is not only as simple as saving card slot space. Apple pursues how to create a better user experience for iPhone users. Therefore, since launching the first iPhone phone, Apple has been constantly pushing the SIM card to smaller from Micro SIM to Nano SIM, and has also been studying how to completely get rid of SIM cards so that iPhone users can connect to the Internet with the simplest operation.
Apple applied for a patent for virtual SIM cards in 2011, and then joined hands with Samsung to launch eSIM card in 2015, and worked together to promote the communications industry organization GSMA to release consumer eSIM specifications in 2016, giving eSIM organizational ownership and unified standards, which is officially accepted by the communications industry.
In 2017, Apple introduced eSIM in iPhone XS for the first time. Since then, eSIM compatibility with physical SIM has begun to become the standard configuration for iPhones. Until the iPhone 14 released in the United States has completely cancelled physical SIM and completely handed over the option to access the network to users.
Therefore, using eSIM, the US iPhone 14 users who can conveniently choose the operator's network, get rid of the sense of belonging to the operator, but increase their loyalty as iPhone users. This is exactly what Apple, which created the IOS ecosystem, wants to achieve, ensuring that users can quickly and smoothly open the APP application downloaded from Apple Store using iPhone. It doesn't matter whether the network you are accessing is Wi-Fi 6 or 5G, and it doesn't matter which operator provides it.
iPhones account for as much as 45% of the US market. Verizon, ATT, T-Mobile and more small and medium-sized operators know the intention of Apple to promote eSIM, but in order not to lose those iPhone 14 users who cannot use physical SIM cards, American operators can only modify the process to cooperate with iPhone 14 users to use eSIM to access any network they want to choose.
When the convenience of eSIM is verified in the US market, it is difficult for Apple to promote the full support of eSIM in more overseas markets, and this will inevitably become the mainstream development trend of the mobile phone market, thereby attracting more mobile phone manufacturers to join in, and together with Apple, more operators will accept mobile phones that only support eSIM. According to GSMA's forecast, the number of global eSIM mobile phones on-network connections will reach at least 850 million by 2025, and will rise to 6.7 billion by 2030, accounting for 76% of the global smartphone connections.
Therefore, the popularity of eSIM will also drive changes in the traditional rules of the mobile communications industry, such as the prepaid billing model, the tariff design of traffic packages, the online statistics of multiple eSIM users, and the operator's user market share calculation, etc., which may all make more favorable adjustments to mobile phone users in the market competition triggered by eSIM.
Users who use mobile terminals to watch video APP are used to lowering the video resolution according to the reminder popped up by the APP to maintain normal viewing. However, in the near future, mobile phone manufacturers led by Apple will automatically switch to the best access network through the pre-existing eSIM pre-existing in the mobile phone based on network performance indicators, and will not take into account the operator's feelings at all...
After all, for Apple, this has never been a surprise to Apple.
*This article was first published in "Communication World"
November 1, 2022 0th Issue 21 Total Issue 907
Original title: Can the eSIM of iPhone 14 impact operators?
END
Author: Lao Jie
Editor/Layout: Shen Hsinchu
Review: Shen Qing
Producer: Liu Qicheng
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-