A software wallet is a cryptocurrency wallet that stores the seed in an application that runs as a desktop application, in a browser or on a tablet or smartphone. Software wallets represent the most ubiquitous cryptocurrency software among users and are typically free of charge. From the point security, software wallets are hot wallets because they expose the seed to online environment.
Some software wallets, like Mycelium and other Trezor Apps, also work with the Trezor device. For that particular use case, it no longer works with the seed directly, but similarly to Trezor Wallet, it serves as a wallet interface for the Trezor device.
See also: Types of cryptocurrency wallets