To make its iPhone 4 smaller and thinner than previous iPhones, one of the steps Apple took was making the SIM card smaller. This saw the birth of the micro-SIM, which is slowly making its way into other smartphones, such as the Nokia Lumia 800.
But Apple is still unhappy with the size of existing SIM cards, and it is pushing to make them even smaller for future iPhones. But other smartphone makers are against the idea.