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Apple’s new SIM approach…
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John Molloy
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Yesterday there was some news about Apple’s new approach to SIM cards.
Jeff Gamet, on our parent site, reported:
The organization that represents the majority of the mobile carriers around the world, the GSMA, approved programmable SIM cards that can be remotely activated on Thursday. The announcement follows rumors that Apple has been working on an embedded SIM card for the iPhone that can be activated for a carrier when the device is purchased, or via the iTunes Store.
Mind you no sooner was that piece up then somebody in the industry kicked back and FT started to report:
Some of Europe?s leading mobile operators are warning that they could take punitive action against Apple if it introduces a technological innovation on its 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.
European operators known to have concerns about Apple?s interest in the Sim include Vodafone of the UK, France Telecom and Spain?s Telef?nica. They all declined to comment, as did Apple.
But one senior executive at a European telecoms group said Apple risked a ?war? over the new Sim with operators, which could refuse to subsidise the iPhone.
The iPhone?s wholesale price is about $600, but the operators charge customers much less and sometimes nothing if they sign up to network contracts that can last two years. These operators? subsidies have enabled Apple to maximise sales.
Such a move ?could ultimately prove to be the first step in a process in which [the mobile operators] cede customer control to handset vendors like Apple, [and are] relegated to commodity capacity providers?, she said.
However, Ms Bienenstock estimated that Apple?s global iPhone sales could be cut by up to 12 per cent if the operators refused to provide subsidies for the smartphone.
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12 precent? Impressive precision on the effect of subsidy.
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Read more at: Asymco Blog
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The operators are privately saying they could refuse to subsidise the iPhone if Apple inserts an embedded subscriber identity module, or Sim card.
As Br’er Rabbit would say, “Don’t throw me into that briar patch!” I can’t think of a better outcome.
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This report ends by saying Apple has already relented on the SIM, at least for next year.
If and when it happens, will the iPhone then sell for full price, and then the telecoms offer contract discounts equal to the former subsidy?
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I don’t know whether Apple’s new Sim card is going to fly or not, but I think it exemplifies just how Apple thinks. They are faced with entrenched industries that are, frankly, in their way and they are always working, working, working to find a way around them, over them or through them.
The iPhone looks like it toppled the phone industry, but what it really did was establish a new OS outside of Microsoft’s Windows monopoly. If Apple TV works, Apple will have bypassed the cable providers and weakened the hold of the content creators. If this new Sim card works, it will weaken the grip of the carriers on the mobile phone manufacturers.
Push, push, push. Apple is always looking for a way to break through the logjams created by the bureaucracy, ineptitude and inertia of others. It’s fun to watch the way they work and to guess at what they’re going to come up with next.
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This report ends by saying Apple has already relented on the SIM, at least for next year.
If and when it happens, will the iPhone then sell for full price, and then the telecoms offer contract discounts equal to the former subsidy?
Buy an iPhone for full price and then activate it with whoever offers the best contract or rates. Suddenly we have COMPETITION in the cell phone industry. Imagine the howls of pain from the carriers.
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I think Zeke hits it.
Some carriers do the ATT bundle with the iPhone in part and others won’t do a hardware bundle.
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Gregg Thurman
- [ Ignore ]
Jeff Gamet, on our parent site, reported:
Such a move ?could ultimately prove to be the first step in a process in which [the mobile operators] cede customer control to handset vendors like Apple, [and are] relegated to commodity capacity providers?, she said.
However, Ms Bienenstock estimated that Apple?s global iPhone sales could be cut by up to 12 per cent if the operators refused to provide subsidies for the smartphone.
I don’t think Apple will make a move like this (it’ll happen) until they introduce an LTE version of the iPhone. By that time iPhone share/demand will be so high that carriers would be absolutely stupid to stop subsidies. All it would take would be for one carrier to break ranks, and soak up all those ‘unwanted’ customers to make them realize the stupidity of their decision.
As we approach that time, watch the carriers go nuts improving their service.
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You can’t do more, make more, be more, than the next guy, if you think like the next guy. Think different.
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This will happen because it just makes too much sense. I also think that this innovation in no way kills the subsidized contract. There will be plenty of people left who will still take a subsidy in exchange for a locked in contract. Carriers have customers who will eagerly accept this as they like their provider best (well, maybe hate less is more accurate), have bundled services and get deeper discounts based on the extent of their devotion, get hooked by upgrade discounts, or simply see it as a buffer to initial purchase sticker shock.
What a great new day this will be, more consumer choice and extra competition. Maybe getting rid of the hassle of managing sim cards will eventually be something that the carriers start to appreciate too. When I picked up my iPhone 4, the Rogers employee had to announce to the line behind me that i had just taken the lastt micro-SIM in stock. He had more phones, but not the SIMs.
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This report ends by saying Apple has already relented on the SIM, at least for next year.
If and when it happens, will the iPhone then sell for full price, and then the telecoms offer contract discounts equal to the former subsidy?
Very good point. I am driving to BC tuesday just to buy an factory unlocked iPhone I can use anywhere in the world. Of course I am usually right at home, so I will be with AT&T or Verizon paying the same (subsidized) rate I pay now, but with no cheap phone and no contract. Which would be kinda dumb actually, if it were not for my tricky little plan to use my iPad micro sim in it and just go VoIP and AT&T data plan only. ($25 + $10/mo for Line 2=$35/mo for lots of calling) And I can use it in Australia. Line 2 gives you a number people can call.
[ Edited: 21 November 2010 03:07 AM by zulu ] -
A phone that works on any carrier? Bold ideas.
Removing lock-in and handset differentiation will force the carrier industry to undergo structural change. Let’s not forget, however, that they are an extremely important piece of the puzzle and will still have a lot of power. Smartphone innovation (thanks to Apple) has outpaced innovation in the pipe. The pipe hasn’t been able to keep up. This spoils the experience for everyone and makes devices useful than they otherwise would be. Now we have devices capable of video calling (FaceTime) but not nearly enough bandwidth to support it.
So how will this work? There was an article in Thursday’s Wall St Journal on potential new Verizon pricing plans based on bandwidth. It’s like a paid toll road. Makes sense, right? After all, car manufacturers (phone makers in my analogy) don’t have toll roads subsidize the cars. The 2 industries are separate. But most roads are public goods and actually funded by government. There was talk on AFB of moving wireless carriers in that direction, but IMO it’s premature and unnecessary.
What that means, however, is that in the meantime carriers will likely start to put quality-of-service into consideration of their pricing mechanisms. Want FaceTime on the air? Pay extra. Want less dropped calls? Pay extra.
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Buy an iPhone for full price and then activate it with whoever offers the best contract or rates. Suddenly we have COMPETITION in the cell phone industry. Imagine the howls of pain from the carriers.
Competition for better pricing AND service. What a concept. Lawmakers: Are you listening?
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Gregg Thurman
- [ Ignore ]
Buy an iPhone for full price and then activate it with whoever offers the best contract or rates. Suddenly we have COMPETITION in the cell phone industry. Imagine the howls of pain from the carriers.
Competition for better pricing AND service. What a concept. Lawmakers: Are you listening?
We don’t need politicians to get involved. That’s where the lobbyists hang out. Just let the market work. In Jobs hands it seems to doing just fine.
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You can’t do more, make more, be more, than the next guy, if you think like the next guy. Think different.
