SIM card market to approach 3.8 billion units in 2010

LONDON, UK: ABI Research forecasts that the SIM card market will grow 10 percent in 2010, approaching 3.8 billion shipments. Driven by growing connectivity demand, M2M, browser-based services, and new business models, it will continue to grow in volume and value over the next few years as new markets and applications come online.

At the same time, MNOs are evaluating which services are best run on the SIM in an effort to maximize security and combat the threat of third-party application stores, which could limit their future data service revenue.

Principal analyst John Devlin says: “SIM cards offer operators a direct presence with the end-user; it makes sense that service providers will take advantage of the increased level of functionality, performance and security. With handset manufacturers and companies such as Google offering their own portals and services directly to end-users, operators need to be able to compete.”

SIM-based applications and browsers can give operators a branded presence and allow customers easy access to targeted services. It’s not just within the smartphone sector that this is occurring; innovative services are being delivered via SIM-based browsers in many 2G and developing markets.

Volume growth is not just derived from more people buying more mobile phones. A growing variety of devices – both consumer and industrial – are being connected.

Devlin notes: “The ramping up of M2M deployments has started. Automotive and smart metering lead the way, with future potential in areas such as tele-health. Additionally, the variety of devices integrating mobile connectivity is growing. E-readers, tablets, netbooks, laptops, PNDs, and gaming devices are all becoming increasingly connected and will offer enhanced functionality as 4G networks deliver greater bandwidth and multimedia streaming capabilities.”

Devlin concludes: “New business models such as revenue sharing agreements are being offered to the operators in an effort to stimulate demand for new applications and features. In turn this will drive up software and service revenues for SIM vendors and developers, as well as demanding higher-level silicon, which combine to increase overall market revenues.”