Apple Sim Design Takes Carriers Out of Customer Picture

Apple Sim Design Takes Carriers Out of Customer Picture

First Apple cut carriers out of the software delivery business. Now the tech giant wants to eliminate the last hold carriers have on customers: the sim card. But should the smartphone maker destroy its partners to build a slimmer iPhone?

For Apple, a so-called “e-SIM” would have plenty of advantages. First, replacing the hardware card would enable Cupertino designers to further shrink the iPhone – perhaps making an iPhone nano more than intriguing speculation. If Apple CEO Steve Jobs adores small things, he absolutely loves control. Having total control of an iPhone user experience would finally solve the problem of hackers ‘jailbreaking’ the handset.

However, one has to be sympathetic to carriers in this case. They are bleeding from loss of revenue. Texting is outnumber voice calls. VoIP applications are stealing even more money. Now Apple wants to make it easy for subscribers to jump ship. Verizon Wireless, which has jumped through hoops for more than a year to obtain the iPhone, must be furious. The e-SIM route would make it “very difficult for a telco or carrier to manage the customer relationship,” France Telecom CEO Stephane Richard said recently.

Perhaps more questionable is whether an e-SIM would damage overall security for cell phone owners. If a person can buy an iPhone, hack the SIM, he or she could mimic anyone. What kind of nightmare would that spawn?

In an attempt to appease Apple’s desire for total control, carriers reportedly want to stall the effort, instead throwing their support behind a smaller SIM card design. Steve could still pursue plans for a chicklet-sized cell phone and carriers could live for another day.

These events only show even Apple can have a bad idea. Carriers, however, shouldn’t get used to wearing the white hat for a change.

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  • prof_peabody

    Some of this info is inaccurate, and mostly, it’s old.  “eSims” have nothing to do with “control of jailbreaking” (I think you mean unlocking), and most every other tech site reported at least a week ago that Apple had actually given up on this idea and was now instead persuing a smaller physical sim in “coordination with” the carriers.  

  • Itsalive

    I weep for the carriers

  • DrPlokta

    Why should Verizon be furious about e-SIMs, when their network is CDMA rather than GSM and doesn’t use SIMs at all?

  • dandymac

    Awww do the poor carries need to suffer more?? HA! REALLY?? You are REALLY concerned about the carriers? Yes, they are hurting soooo bad. AT&T is barely able to remain a business…
    Oh wait, that’s right, they happen to have enough cash on hand to BUY TMobile!!

    Seriously man, who do you work for, AT&T? Verizon?

    easily the MOST dribble I have seen from a corporate sponsor!

  • chano

    Clumsy, careless writing here.
    Do you know what you mean by ‘appease’? Your sentence contradicts itself.
    Why do you assert that an eSIM compromises security? Tell us how and why, whydontcha Ed?

  • CharliK

    good point. on the surface it seems like they wouldn’t. But if the SIM was electronic and not physical that gives room to put in two chipsets so you could have CDMA and GSM in one phone every easily (rumor has it there’s always such a chip in the Verizon phones so it could even be LTE, GSM and CDMA with that extra space). And a software update is all you would need to swap carriers even across networks. 

    Right now Verizon and Sprint are ‘locked’ because the phones are programmed to one network and there’s no easy way to reprogram them. With a trip chip set up and an electronic sim, there would be written in an easy way. And Apple might go so far as to finally realize factory never locked phones or if you bring proof you finished your contract or bought it out, they will unlock it (but likely only starting with the iphone 5 no earlier models)

    So if some other carrier offers better plans than even Verizon, folks can easily jump ship

  • CharliK

    Yep, no connection to unlocking or jailbreaking. 

    what this likely is about is a baby step. Get the carriers behind this very micro sim and perhaps some kind of legit unlocking rule and then in another generation or two they do the e-sim and dump the physical card. Which makes a lot more sense when pretty much everyone is on LTE

  • reneMAC

    Great job.

    One sentence you state that an e-SIM “would finally solve the problem of hackers ‘jailbreaking’ the handset.” (current SIM cards have nothing to do with it anyhow), but thats beside the point.

    Then you go on to say: “Perhaps more questionable is whether an e-SIM would damage overall security for cell phone owners. If a person can buy an iPhone, hack the SIM, he or she could mimic anyone. What kind of nightmare would that spawn?”

    Which is it, completely locked down as you stated, or hackable which you stated?

    “However, one has to be sympathetic to carriers in this case.”

    Really, why must I sympathize with a carrier? 
    Are they not a business like any other? Perhaps if they had a better product at competitive pricing they wouldn’t have anything to worry about. Customers would be happy, and wouldn’t “jump ship” as you put it. How about putting together competitive pricing and service so that people will WANT to use your network instead of leave it? Seems to me if you did that, you would attract customers.

    Maybe not being able to keep the customer under their thumb (“manage the customer relationship”), they will try and develop their companies/infrastructure and provide value for our money. This is what drives a free market economy, competition. 

  • reneMAC

    Great job.

    One sentence you state that an e-SIM “would finally solve the problem of hackers ‘jailbreaking’ the handset.” (current SIM cards have nothing to do with it anyhow), but thats beside the point.

    Then you go on to say: “Perhaps more questionable is whether an e-SIM would damage overall security for cell phone owners. If a person can buy an iPhone, hack the SIM, he or she could mimic anyone. What kind of nightmare would that spawn?”

    Which is it, completely locked down as you stated, or hackable which you stated?

    “However, one has to be sympathetic to carriers in this case.”

    Really, why must I sympathize with a carrier? 
    Are they not a business like any other? Perhaps if they had a better product at competitive pricing they wouldn’t have anything to worry about. Customers would be happy, and wouldn’t “jump ship” as you put it. How about putting together competitive pricing and service so that people will WANT to use your network instead of leave it? Seems to me if you did that, you would attract customers.

    Maybe not being able to keep the customer under their thumb (“manage the customer relationship”), they will try and develop their companies/infrastructure and provide value for our money. This is what drives a free market economy, competition. 

  • Brittp2

    Even if you could/will/possibly change the sim card, you would still have a carrier contract to honor.  every phone has a unique id—- no? that links it to a CONTRACT. and the security is a vapor rant… there is NO SECURITY for any electronic device..period. Every piece is hackable or observable by either criminals or government so the story goes…. 

  • Anonymous

    “However, one has to be sympathetic to carriers in this case. They are bleeding from loss of revenue.”

    Is this a poor attempt at sarcasm?  If $31B is a loss of revenue, then sign me up to bleed like that.
    AT&T: $31B http://ycharts.com/companies/T
    VZ: $27B http://ycharts.com/companies/V
    Sprint: $8.3B http://ycharts.com/companies/S

    Admittedly I use a tiny fraction of my minutes each month, but fortunately (for AT&T), they don’t charge me any less than if I had them all.

  • V10LETBLUES

    What the heck kind of article is this? The article seems to be written by a lobbyist for the telecos themselves. lol

  • cheesy11

    this is apple trying to again control the market, control the sellers, ultimately controlling and tying in their customers

  • Daibidh

    Managing the customer relationship….  is that what they call it these days?

    It’s my bloody phone.  I pay for it in outlandishly inflated service fees.  Subsidy my arse!

    It’s time carriers remembered their place.  They’re a UTILITY!  Sell me the bandwidth and stop concerning yourself with how I use it and with what!  Voice, data. or text, why should it matter?!  bandwidth is bandwidth!

    Locked phones and lengthy contracts are anti-competitive and anti-consumer.  Even those subsidized phones we US consumers have grown so accustomed to are insanely expensive and are just a tool of carriers to limit choice in the long run.

    Eliminating the SIM, along with multiband chipsets, is one way to start moving the balance of power back towards the consumer, where it belongs.

  • Reggid Evarg

    Geewiiz Ed Sutherland, could you wipe your nose there is a brownish substance! I don’t care for Apple’s control everything but it’s not as bad as I hate the carriers’ version of control everything!!!

About the author

Ed SutherlandEd Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

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