Research analyst Satyajit Sinha said the growth of eSIMs would revolutionise how connectivity across devices would be activated and managed.
"The eSIM’s compact form factor offers significant space reduction for device manufacturers along with potentially higher security, re-programmability, and power efficiencies over the traditional SIM card solutions," he said.
"For operators, eSIMs can significantly reduce the SIM distribution and activation costs while the potential to generate higher roaming revenues exists.
Sinha said though most current eSIM deployments were proprietary software solutions, hardware-based eSIMS were gaining traction, thanks to Apple, automotive OEMs and wearables.
Leading suppliers of hardware-based eSIMs include Infineon, ST Micro, Gemalto, G+D, and Workz while proprietary soft SIM-based eSIM solutions were supplied by RedteaMobile, Truphone, Telna, ARM, roam2free, and others.
Counterpoint research director Neil Shah said automotive and enterprise IoT devices would continue to remain high on the eSIM adoption curve in future.
"Further, the eSIM activation rate in cellular enterprise IoT devices will also be much higher than consumer IoT devices," he said.
"Key drivers are fragmented deployments, module space savings, robust tamper-proof security, flexibility in choosing the best available and competitive cellular network seamlessly as well as saving significantly on physical provisioning, and maintenance costs.”
The company said adoption of eSIMS in smartphones should be the main driver of volume growth as big players like Apple and Google adopted the technology. eSIM adoption by mobile hotspots, routers, connected PCs, drones and smartwatches would exhibit a higher compound annual growth rate due to their smaller base.