Carriers Object to Apple's Plans for Built-In iPhone SIM Even as GSMA Moves Forward

[MacRumors]

Late last month, we reported that Apple has been rumored to be developing a custom built-in SIM card solution for the iPhone, a programmable chip that would allow users to activate their devices with a broad array of carriers without requiring extensive interactions directly with the carriers. In support of that notion, the GSM Association yesterday announced that it is launching a task force to study how such technology could be adopted, bringing on representatives from cellular network operators to help develop a list of requirements for the technology by January 2011 and bring products to market by 2012.

The GSMA today announced the formation of a task force of mobile operators to explore the development of an embedded SIM that can be remotely activated. The move is expected to enable the design of exciting new form factors for mobile communications. It will also speed the development of M2M services by making it easier to bring mobile broadband to non-traditional devices such as cameras, MP3 players, navigation devices and e-Readers, as well as smart meters.

But while the GSMA and carriers appeared to be getting on board with the overall concept of embedded SIMs, Financial Times reports that several European carriers are threatening to withhold their iPhone subsidies if Apple deploys the technology on the iPhone.

The operators are privately saying they could refuse to subsidise the iPhone if Apple inserts an embedded subscriber identity module, or Sim card.

The operators are accusing Apple of trying to gain control of their relationship with their mobile customers with the new Sim. The technology could allow customers to buy the iPhone and sign up for service on Apple's website and start using it immediately.

Closer to the operators' hearts, it could allow customers to switch more easily from one to another or insist on shorter-term contracts. It could even set the stage for Apple to resell connection service on its own, although the company has not indicated such plans.

According to Rodman Renshaw analyst Ashok Kumar as relayed by TheStreet, Apple has already relented and will not be pursuing the technology in the immediate future.

"Apple is relenting," said Rodman Renshaw analyst Ashok Kumar. "They are now completely backing away from their plan to take the carrier out of the equation," said Kumar, who discovered the change in plan after talking with Apple suppliers and manufacturing sources.

TheStreet and Kumar have a mixed track record, however, and it is unclear whether this information is accurate. Given that the GSMA appears to be getting on board with the technology, it may simply be a matter of slowing down the development process being pursued by Apple in order to ensure that all of the involved players can have their concerns address and that a broader strategy for the technology can be planned.

Article Link: Carriers Objecting to Apple's Plans for Built-In iPhone SIM Card Even as GSMA Moves Forward

 

[KPOM]

It's good to see Apple at least considering this idea, even if they have backed off for the moment. The more that manufacturers attempt to rein in the carriers, the better things are likely to be for consumers.

 

[orbital]

And people think Apple is behind the signal and contract issues with the iPhone? Its the carriers and their arcane ways.

 

[studiomusic]

Kind of like number portability was a big issue back in the day. Cell companies were fighting that one hard!
Go Apple! Change things for the better again.

 

[Gen]

And people think Apple is behind the signal and contract issues with the iPhone? Its the carriers and their arcane ways.

Yeah I'd think phones would work better if I didn't have to deal with AT&T, seriously ... why do I have to call them or be in contact with them? When my phone was on the fritz they told me to call Apple every time, anyways

 

[MBrod208]

Can't have that

We'd hate to actually give consumers freedom and ease of use now wouldn't we?

Nice to see Apple thinking out of the box on this. Hope they keep pushing to do this someday.

 

[scotty321]

Example #3,672 of how Apple is the only corporation left that goes to bat for you, the consumer, the little guy.

All other corporations want to FSCK you over!= for their own profits!!

GO APPLE. The ONLY corporation worth supporting.

 

[RogueWarrior65]

Withhold subsidies? Good luck with that.

Apple is going to do to the cellphone companies what it did to the record industry. For too long the record industry depended on people willing to pay $15 for 11 songs they didn't want just to get the one song they did. iTunes and the iPod pretty much blew that business model out of the water.

Now that the iPhone has pretty much altered the make up of cellphone devices, Apple is in a position to dictate to the carriers how things will be moving forward. People want not just smartphones but good if not insanely great smartphones and are willing to pay for it.

 

[MacGiver]

This built-in SIM will kill their professional business...it is already very poor. I work for a large internaltional company (not a start up or even a mid size company). So far only BB are accepted. They were talking about the iPhone but the data plan is so much more expensive than the BB. There is no point for a large company to go to the iPhone price wise...and now that built-in SIM...I do not beleive it is a smart move at all. RIM must be happy...

 

[catracho]

Please NOT

I hate the idea. I want the freedom of choose my carrier for my own, everytime, everywhere.

 

[Stella]

I hope Apple are ready for a drop in iPhone sales.. once that subsidy is gone, $600 is a lot of money upfront for a phone. The majority of people cannot justify that sort of money.

Many people will just pass and go for some other type of smartphone.

 

[shartypants]

I like it when Apple uses their power to push the edge. Wouldn't it be great if your phone would work anywhere in the world without huge roaming fees, when we get to that point it will be a great thing.

 

[bbplayer5]

I hope Apple are ready for a drop in iPhone sales.. once that subsidy is gone, $600 is a lot of money upfront for a phone.

Many people will just pass and go for some other type of smartphone.

You know the first iPhone had no subsidy right? Pretty sure that did well

 

[alywa]

Good. Here's a little clue cellcos...

YOU PROVIDE BANDWIDTH. That is all you do. I desire nothing else from you. I don't need your crappy software, UI, or custom solutions. I need mobile bandwidth. I will bring my own devices.

 

[jacollins]

My suspicion is that the embedded SIM has nothing to do with making it easier to switch carriers, easier to setup, or Apple taking over the carrier relationship.

I think that it is an aesthetic thing, similar to the non-removable battery. Embedded SIM = one less port or door to mar the iPhone beauty, and less space taken up in the internals to have a method of removing the SIM.

 

[dashiel]

i read somewhere that the integrated sim was actually part of the next GSM spec and all handset makers are going to head in this direction. they (the handset makers) hate the carriers. apple was the first able to throw off the initial shackles of the carriers, this is the next (final?) step. google is handing back a bit of that control which is a shame, but i think we're well on the way to cell carriers being dumb pipes.

carriers will have to compete on price and network performance (wow there's a shock) instead the hard work and innovation of handset makers.

 

[arbitter]

I like the idea, I really do. It would also make carriers go back to doing what they're supposed to do; maintaining the network.
However the bad thing about this is that you can't quickly change sims when your phone's battery is dead. Or say if your iPhone goes to the factory. I don't think Apple gives replacement-phones?

 

[supmango]

If Apple is successful in this move, it will ultimately change the way that all entities (individuals and corporations) deal with large telecom companies. So I think it is a good thing. Its always nice to see things getting shaken up a bit from time to time. Especially when the current model basically locks the average consumer down so hard that they can't even think about switching to another carrier without also thinking about bankruptcy (ok, slight exaggeration). The negative is that carriers would probably stop subsidizing the iPhone, at least until other phone manufacturers adopt the same model, because it will basically rip the rug out from under them. I say, let 'em squirm. Especially AT&T.

 

[Stella]

You know the first iPhone had no subsidy right? Pretty sure that did well

Yes, you are right, however, things have changed since then.

Don't forgot US consumers cried when Apple lowered the pricing :-\

iPhone had subsidy in Europe and Canada, and now in the US.

 

[Amazing Iceman]

It makes sense on Apple's part to want to do this.

Maybe Apple is planning on the future buying bulk airtime from carriers and reselling it to their clients, avoiding any customer interaction with the carrier.
Apple would be acting as a "wireless carrier" without actually having to deploy their own wireless network.

By doing this, users will not be limited to a single carrier, being able to roam freely, even all over the world without having to pay roaming fees or wasting time contacting a local carrier to activate service.

 

[Mavimao]

I'm sorry, but I quite like the European model of being able to pop out your SIM card and place it in any unlocked phone you'd like.

What if your phone breaks down and you need a back-up phone? How do you transfer the information?

 

[ten-oak-druid]

Hopefully this will be available in 2012 when the contract with ATT is over.

 

[ifjake]

the carriers are in need of some real competition. those monthly bills are outrageous. that's solely the reason i don't have an iPhone, and i'm sure Apple knows that that's the top reason keeping people from getting them. it's been how many years since the iPhone first came out, definitely longer than the wait for all those 2 year contracts to expire. competing on what phone you offer on your cellular network is lame, i'd rather the competition be toward how well the network works, that's their primary job.

 

[Paradigm]

I think its good as well. My belief with the success of the iPhone (at least in the U.S.) is that Apple got AT&T to allow Apple to manage the content going on the iPhone, through iTunes Store and the App Store. This is done through Apple, not the carrier. That is huge! The carrier only supplying the network and bandwidth and letting someone else supply the content. Never before the iPhone.

God forbid the carriers let their customers choose! If its such a huge concern for an imbedded SIM card and GSM/CDMA hybrid chip, then Apple should pull the iPhone for being sold in the carriers' stores and only be sold through Apple, and lets see if the iPhone sales go down. Sales would go up, way up, if the user has the choice of carrier for the device they just bought.

The only reason I'm on AT&T is because of the iPhones on my account. If it was on any other carrier, I would probably be with the other carrier. AT&T has been saying for 3 1/2 years now that Kalamazoo, MI is getting 3G service. As of today, still no 3G service! Unacceptable for a major college town. We have 3 universities and colleges. Verizon is 3G here!

 

[Tilpots]

It could even set the stage for Apple to resell connection service on its own, although the company has not indicated such plans.

It's coming... A true end to end Apple experience. These carriers, and even ISPs, need to be afraid, very afraid. $50 Billion could go along way to buying a content delivery system, be it satellite, spectrum or something we haven't seen yet.