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Is Apple About to Cut Out the Carriers?

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Sources inside European carriers have reported that Apple has been working with SIM-card manufacturer Gemalto to create a special SIM card that would allow consumers in Europe to buy a phone via the web or at the Apple Store and get the phones working using Apple’s App Store.

It’s rumored that Apple (s aapl) and Gemalto have created a SIM card, which is typically a chip that carries subscriber identification information for the carriers, that will be integrated into the iPhone itself. Then customers will then be able to choose their carrier at time of purchase at the Apple web site or retail store, or buy the phone and get their handset up and running through a download at the App Store as opposed to visiting a carrier store or calling the carrier. Either way, it reduces the role of the carrier in the iPhone purchase. Gemalto and Apple have not responded to requests for comment. I’m also waiting to hear back from other sources to get more details.

However, if Apple is doing an end run around the carrier by putting its own SIM inside the iPhone, it could do what Google (s goog) with its NexusOne could not, which is create an easy way to sell a handset via the web without carrier involvement. Much like it helped cut operators out of the app store game, Apple could be taking them out of the device retail game. Yes, carriers will still have to allow the phone to operate on their networks, which appears to be why executives from various French carriers have been to Cupertino in recent weeks.

The Gemalto SIM, according to my sources, is embedded in a chip that has an upgradeable flash component and a ROM area. The ROM area contains data provided by Gemalto with everything related to IT and network security, except for the carrier-related information. The flash component will receive the carrier related data via a local connection which could be the PC or a dedicated device, so it can be activated on the network. Gemalto will provide the back-end infrastructure that allows service and number provisioning on the carrier network.

The model should work well in Europe, where the carriers tend to use the same networking technology and are far more competitive. It also means that customers can roam more easily with the iPhones, swapping out the carriers as needed. The iPhone has lost its exclusivity in much of Europe and other markets of the world, which makes this model a compelling one for consumers, but a nightmare for carriers. Apple could change the mobile game once again.

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147 Responses to “Is Apple About to Cut Out the Carriers?”

  1. Hmm. Lets break this apart.

    First, you can make something that looks like a SIM but which can in fact present itself to the network as several different SIMs – an Orange SIM in France, a Vodafone SIM in Germany etc. This isn’t really a new idea – Truphone is already doing it.

    There are two hurdles, though. First, each virtual SIM will have a different number, so you need a service somewhere managing redirection. You can use number portability up to a point, but that takes time – a few hours at last and up to a week in some countries. It will never be instantaneous.

    Second and more importantly, each of those networks needs to agree to let you make one of ‘their’ SIMs. That in turn mean’s that you need an MVNO deal. And the only MVNO deal you can get is the one that the carrier decides to let you have.

    That means that your changes of radically disruptive pricing are precisely ZERO. If you want to choose your own pricing, YOU go out and spend $10bn building infrastructure.

    • Howdy Doody

      @Benedict Evans

      “That means that your changes of radically disruptive pricing are precisely ZERO. If you want to choose your own pricing, YOU go out and spend $10bn building infrastructure.’

      Apple’s sitting on $50B cash in the bank. If they were serious about it they could build a credible LTE network of their own in the USA pretty quick…..or maybe buy/partner with T-Mobile from Deutsche Telecom and fill in the coverage holes.

  2. Oddly enough, I just received an email asking me to fill a survey from the Apple Store, where I bought my iPad.

    One of the questions (translated from Spnaish) says:

    “Which of the following do you expect/hope to find in the online Apple Store”. Two of the possible replies are “Purchase a SIM card for iPad 3G” and “Purchase a data plan for the Ipad 3G”.

    They also ask about getting info on those items and other MobileMe questions.

    Now, they may only be thinking about selling the carrier’s SIMs and data plans and taking a cut, but it’s still interesting…

  3. This would be a disaster in Europe. European countries tend to be small, and people cross borders all the time – so often, in fact, that many people have cellular service accounts in multiple countries, and carry multiple SIMs with them. An acquaintance of mine, for example, lives in Belgium and works in Germany. Halfway through his morning commute, he’ll stop for coffee and swap out his Belgium SIM for his Germany SIM, doing the reverse on his way home. For him, it doesn’t matter that the internal SIM would be reprogrammable – he can’t exactly walk into an Apple Store at 7AM every weekday and hang around a half hour while they reprogram his SIM.

    And of course, he’s far from a unique case, especially among the kind of affluent, technophilic class of people that buy iPhones. This would basically make the iPhone unusable for a very large swath of Apple’s prime demographic. It would certainly destroy it as a businessman’s phone in Europe.

    I have real doubts that Apple would be that stupid. more likely, they’re just making stuff up to pressure European carriers with.

  4. Wouldn’t matter. Apple needs the carriers not the other way around as it owns no communications infrastructure. It can play the card of being carrier-agnostic but it’ll always be their bitch, not the other way around at least for now.

  5. No thanks. Apple already has enough control. Remember that 1984 commercial? 25 years later, Apple now plays the part of Big Brother. I want the ability to place any SIM in my phone when I want, where I want and in the phone I choose to put it in.

  6. I bought my phone unlocked in Mexico, yet still had to go to Telcel (my carrier) to switch my old SIM card for a micro one, the SIM card didn’t work, so I had to return to get it replaced, add to this, waiting, parking and boredom (since my old iPhone was out of SIM card.) Having “downloadable” SIM cards would be awesome!

  7. Stacey
    I think you may be missing something important in this move.
    Gemalto/Orga and all these SIM providers do provide universal SIM for MNOs. It is just a matter of Operator dependant encryption to decode the Carrier signal. A GSM SIM doea see all surrounding carriers signals…but only dcerypts one. When roaming, you can easily swich from a carrier to another manually and instantly the right carrier is selected and works fine.

    The Novelty in the in-Phone SIM is the ability from something like iTunes to select the needed carrier automatically. Gemlato through technologies such as OTA ( over the air ) server does this regularly to correct your GPRS config/apn…

    Imagine now that Apple acts like a Global, multi-carrier MVNO…that cut deals from various carriers. They can directly provide you custom contracts with teh exact packaging they want and remove some silly data charges such as roaming. Knowing Apple, the airtime price is not going down but you get something like guaranted premium service ( best quality, best coverage, best data speed) with iTunes trading in real time between various carriers to find the best service anytime you need to call.
    This would be a giant step !

    Alternatively, you may get discount based models. Today, some operators discount up to 90% the price of call based on radio network load at caller location. This happens today in Africa (via MTN) and in many emerging markets. With a multi-carrier deal, an “cheap” MNVO can also play very well with in-Phone dynamic SIM strategy.

    Just guessing.

      • David Famolari

        To carry the speculation forward, Apple has shown interest in 802.21, a media independent handover standard. Central to this standard is the ability for mobiles to query for rich network discovery information that would support the type of multi-MNO approach mentioned by tkanet.

        Believe that payments, though, is the real end game.

      • Sorry for that. I’d still read it please go ahead.

        Seriously, I designed this as concept few years ago and discussed a lot about it few months ago with some friends at the silicon valley. Being in the telco industry in the prepaid front helps a lot anticipate these.

        The market is getting more and more saturated everywhere …and it will not be surprising to see carriers battling to capture a subscriber, even temporarily for a single call. That is where multi-carrier MVNO plays a role. and this is cming very soon.

    • I recently did a report for the Dutch FCC on this. The whole Machine to Machine world is looking at this, but is finding some serious trouble in convincing regulators. Most of it hinges on the definition of a public network.

      Doing Over the Air updates is technically possible. However getting the right operator credentials to load onto the SIM-card isn’t as trivial as you make it sound. Next to a 15 digit IMSI-number that identifies the telco through a Mobile Network Code and the customer through the first 6 digits and the 9 digit Mobile Subscriber Identity Number part of the 15 digits, there are some crypto keys and parameters that need to be send over the air. The 3GPP looked at standardizing this process, but the GSMA has said they don’t want over the air updates as it weakens security. Now, every vendor of SIM-cards and security software has a solution for OTA and SoftSims, but if you don’t get IMSI’s and associated keys from telco’s you’re stuck. I did hear that the likes of Gemalto often keep the keys secret even for the telco. They load them onto the HLR/Authentication Center, but that doesn’t mean they are at liberty to be handing them out to anyone who wants to.

      An alternative is that Apple would get it’s own IMSI’s. It could get these either at the ITU in the 901 MNC range or it could go for a national range. The problem then is negotiating roaming deals with all the European operators and preferably with all 800 mobile network operators in the world. If it could do that, that would be a first as the roaming market is extremely closed. Normally it is only open to networks that have a GSM-family spectrum license (at least that was what I was told), though there are some ways around that some people I spoke to.

      Getting Telcordia or a European regulator to give access to Apple to IMSI’s shouldn’t be too hard as Apple is making a public offer and so does qualify. Apple would then need to manage it’s own HLR and network connects, but it could ask Ericsson to do that for it. (That’s what big networks do)

      • Thanks Rudolf. I did not know the red flag for sending SIM encryption parameters over the air.

        Actually, i dont think Apple (or Google or even simpler RIM) have to go that deep as to having their own HLR.
        I think they just need to cut deals with say the major 10/15 main carriers brands and use their affiliates and roaming partnerships globally. I mean if they have a deal with Vodafone to be their main hosting network in a set of countries where Vodafone has dominant positions and replicate the same with orange, Telefonica, T-Mobile, MTN, Barti …with just 10 major brands, you can cover the world.

        Another valid point would be to just have their own rating/CRM plaform that would then connect to carriers SCP (call control layer) …this way, they can define their own offers and price plans…and later settle with carriers based on local network usages. this is happening today with major retailers having one to one MVNO deals and now offering their own price plans. the novelty would just be having a multi-carrier deal. If the subscriber is covered by on of the preferred networks, simply switch the SIM encryption.
        The SIM switching needs to be managed properly based on predefined criteria (country, network quality, data speed, network load…costs)….but using agreed parameters. There is no need to force anything here …as the deal would allow Apple to have those parameters from the Carriers.

        From a carrier perspective, there will some reluctance to accept this …but the market has become very competitive. Those who signed with Apple in 2007 (ATT&T, O2 vs Vodafone) have largely benefited from Apple’s continuous innovations stream…so it would be risky (again) to miss the train.

        I think this is extremely relevant for such renown brands …but requires a lot innovations and tactics to come to a winning partnership.

  8. phones should not come with any SIM card at all. i want buy a phone and than select a carrier SIM after examining the plans available and marry the two together.

    i see this as a move by apple to take away more control. if they are programing the SIM they than determine what plans we can sign up for as well.

    if phones are unlocked it is very easy to simply swap SIM. i do not want go through the app store for that, i want go to the corner grocer or whoever has the best deal. i doubt apple will cut deals with the cheap prepaid MVNOs, but with a SIM unlocked phone this is as much an option as the major carriers, with an apple programmable SIM phone likely not.

    i fear this will be very bad for consumers.

    • Marcos El Malo

      Think of it as a sim that is flashable over the air. Aside from the other interesting implications for this technology, it will be more convenient than physical sims and shouldn’t take away any of your freedom. It would actually make that freedom more easy to use.

      Apple is in the business to sell phones. I doubt it really makes a difference to them who the carrier is if it will help them sell more phones. That would include the prepaid carriers.

  9. will the iphone’s be locked to these special SIM cards?

    if yes this may be even worse than locking them to a carrier where at least you can usually find a way to substitute a cheap prepaid SIM for the official contract one.

    if the phones will be completely unlocked than cool, but i still think the best way to select a carriers is to simply drop a SIM card in the slot of an unlocked phone.

  10. This would turn a GSM phone into a CDMA phone, in a manner of speaking: no swapping-out SIM cards to avoid roaming charges.

    More or less you are locked-in to one carrier for the lifetime of the phone.

    That’s fine for most people, but business travelers would find this approach cramps their style of swapping SIMs to avoid roaming charges.

    • Hamranhansenhansen

      No, you have it backwards. It would turn a non-SIM CDMA phone into a SIM GSM phone. A user could switch their phone from Verizon to Sprint by themselves, which is not possible today. Or switch it from AT&T to Verizon, which is also not possible.

      A lot of people here are focusing on the idea that Apple would take the power to switch carriers away from the carrier as if Apple would then keep that power for themselves. No. They will put a menu in front of users: “Choose carrier: AT&T, Verizon, Sprint, T-Mobile.” The power will move from carriers to users.

      Business travelers don’t like to swap SIMs per se. They like the savings that gets them. A SIM is like a little floppy disk that holds 1 carrier. The new Apple method is like a hard disk, it could hold dozens of carriers. A business traveler could program their phone “when in Germany, use German Carrier X, when in France, use French Carrier Y, when in UK, use UK Carrier Z, when in US, use US Carrier A” and never touch it again and always get local carrier service wherever they are, without manually working with SIM cards.

      Another analogy would be music CD’s versus iTunes+iPod. An iPod is not 1 CD you can never change, it’s hundreds of CD’s with a menu so you don’t have to manually change them, and you manage the whole device with iTunes. This new Apple tech is “iTunes for SIMs”.

  11. This is not a SIM replacement technology. Apple needs this for the US market in order to be able to cater to the needs of Verizon and yet make one phone for the whole world. This will probably be included only in the CDMA version of the revised iPhone. No operator is getting cut out of anything. Also Apple is not cutting out the operator even in the CDMA areas. Apple will actually part subsidize the new equipment and systems that operators will have to install. For one Apple already paid Gemalto for the development of the new module and this is a huge expense.

  12. mmerliner

    this just backs up rumors that appl may provision an all in one radio chip for all carriers. this would make gemalto as the defacto mobile payment system – the tech behind smart bankcards, e-passports, national id cards for so many countries.

  13. Trading one master for another…

    Apple is great at making things easier for the consumer, but it always seems to involve giving Apple some of your freedom instead of the other guy.

    • Hamranhansenhansen

      Then do not buy gear from Apple. It is no secret at all that they sell you not just a device but rather a complete solution. They are not just your device maker, they are also your I-T consultant. You deliberately and specifically give up the freedom to be your own I-T consultant in order to gain the much more commonly desirable freedom from having to be your own I-T consultant. That is why I-T people drone on and on about Apple taking away their freedom while the other 98% of us drone on and on about Apple freeing us from I-T. Ultimately, the only freedom that matters is your freedom to shop at Apple Store or not shop at Apple Store. Again, it is no secret that Apple works like this. It’s their most popular feature. They make computers “for the rest of us” which means not I-T people.

  14. Very possible, and would solve the many problems consumer electronics manufacturers like Apple face when trying to “embedd connectivity” in their products.
    To go even further, Gemalto owns one of the largest SMS delivery platforms, connected to all mobile networks. It is also the leading provider of Over the air platforms that allow remote configuration of SIM cards using mostly SMS.
    So it could in theory offer a cloud service allowing remote provisioning of a specific SIM card, to change the mobile network operator (or any other parameter) at will without any physical intervention on the device… Ultimate network portability!
    Of course it would require that MNO authorize these “programmable SIMs” to join (and leave) their network at will…

  15. But, is it really any different to how it works now? Here in the UK I can go to and buy an unlocked iPhone 4, without a SIM card, for £499 ($787 approx, but it includes 17.5% sales tax).

    If I do that, I have to get a SIM card from a carrier. Normally, I’ll want a contract too, because pre-paid tends to be expensive – especially for data.

    Effectively, this new approach would just mean I don’t have to wait for the SIM card to arrive before I start using the phone. It’s more convenient, but ultimately the same people are involved.

    Unless I’m missing something?

    • Actually, you can go a step further than that – use companies such as MaxxRoam or Truphone and then never have to change a SIM card for most countries, get local numbers for most of them, and solid prices for messaging and data.

      That would be the best competitor to a move like this; and if NFC on the SIM is involved, it would be these companies (and maybe Skype if they went that route) which would be able to shatter that aspect of the carrier-driven mobile model.

      • But if the SIM is integrated to the chipset on the phone you won’t have the option, unless MaxRoam or TruPhone are ‘certified’ Apple carrier partners. What is the cost for certification, what does Apple want in return as far as revenue share?

        Lots to think about on this one.

      • Just realized I was being totally unclear. I meant that if the end-user hurdle to switching networks on a device was easier, Lightsquared would see more interest from retailers such Amazon/BestBuy and even folks like Facebook that could use their infrastructure to create white-labeled networks.

        But the consumer subs angle is really interesting too.

        Awesome reporting Stacey!

  16. cartman7110

    i don’t this as advantageous to the end users at all. in fact what will happen is if Apple controls which carrier is permitted, then you as a consumer is basically locked to which Apple allows you to have via that app store app.

    So i was to travel to say, Hongkong where there are three carriers and Apple only has partnership with one, then its like getting locked back where you were but now only to one carrier.

    In short, you as a consumer is no longer getting an unlocked phone which you can use a overseas carrier’s SIM at your choosing but rather a Apple managed phone.

    That’s just the carrier. Imagine the plan you’d be required to sign up to.

    This is a cartel if you ask me (something like Apple saying — either you’re with us or against us).

    Shouldn’t the GSM association disagree too this approach?

    • Hamranhansenhansen

      It’s not about Apple controlling which carrier is permitted. It’s just a “virtual” SIM. You don’t have to physically go to a carrier and get a SIM and open the phone and put the SIM in, you just plug your phone into a network and the virtual SIM inside is programmed for the carrier you choose. The Apple devices are carrier-independent today and would remain carrier-independent under this new technology. The virtual SIM would actually make them more carrier-independent by making it easier to switch carriers: you could just plug your device into iTunes and select “Change carrier …” and a few minutes later you’re on a different carrier.

      A key benefit of Apple devices is carrier-independence. In almost all cases, if you can’t run your Apple device on a particular carrier it is because that carrier uses non-standard networking technology, and so far, Apple has made only standardized devices. So Apple is not choosing your carrier today and won’t be tomorrow.

      Another key benefit of Apple devices is Apple-dependence. They are administering the device at a very high level that would otherwise require the user to hire an I-T consultant, freeing the user from I-T tasks like auditing apps. This is outrageously popular with the 98% of humanity who have zero I-T skills and even less interest in developing them. If you don’t like Apple-dependence then don’t buy an Apple device. An iPhone is not just a car, it’s a car with chauffeur and mechanic. If you want to be your own chauffeur or mechanic, buy any other device from any other maker. Do not complain that Apple should sell just the car like everyone else.

      • many years ago a security attack on sim cards was shown to be possible whereby one could duplicate the credentials inside a sim card and hence have multiple phones on the same network with the same ID (certainly not a good thing for most consumers). much of sim card security is in the fact that the private key identifying a sim on the cell network is stored only on the sim card and on some secure telco server and never actually revealed (instead, the sim card implements some basic functionality that signs things with that key. this function is called by the cell phone).

        i wonder if problems related to the revelation of the secret key have been overcome. if not, it seems entirely plausible that a program sniffing the line between the iPhone and computer when wireless carrier signup happens could extract all the information that’s needed to, say, program two iPhones to both be on the same mobile account.

        seems like the first thing apple would want to deal with, security-wise. i wonder what they’ve done.

    • Howdy Doody

      iPhone 4 users in Canada have a choice of 3 GSM carriers, and if the baseband radio in the iPhone was tweaked to cover 1700/2100 (same as T-Mobile USA’s 3G) then they’d have a 4th carrier (WIND) to choose from.

  17. Something fishy here…

    Post implies carrier independence is just a matter of a universal SIM, which is inaccurate

    The carriers 3G run at different frequencies, each requiring different IC radio chips and radio software stacks – in *addition* to the SIM card.

    • Todd,
      How do you move a phone across carriers in a single country right now (say Germany or France)?

      How does Apple support multiple frequencies without massive amounts of iPhone hardware configurations?

      I hear the iPhone 4 has a 5 or 6-band radio.

      • If you switch carriers right now, all you do is put in a different simcard. That’s it.

        You get the same models in every european country, and you can use them on pretty much all other networks (In Western Europe at least).

    • Todd, I didn’t get into the complexities of different network technologies and frequency bands, but quad and six-band radios are already here, and it’s another reason why this makes sense in Europe since many carriers are on GSM networks already. And I did mention that the phones will still need carrier permission to get on the networks. But yes, it’s not as simple as a universal SIM that magically unlocks the phone everywhere on all carriers.

  18. Are you missing a bigger picture here? As well as being able to seel the phones through their own site will this secure ROM area be used for the NFC compatible payment applications? ‘Gemalto will provide the back-end infrastructure that allows service and number provisioning on the carrier network.’ I suspect they will provide a bit more than that I maybe massively wrong but in many ways I hope not as this really will change the game.

  19. Shame that it will take a move like this to make what should be the cases with all mobiles all the time. And I do understand that carriers need their ROI, but how they’ve been doing it has rubbed everyone (people, utilities, manufacturers, and governments) the wrong way. Heck of a play if it happens – and just the kind of move that could probably (at this point) only be pulled off by Apple.

    • Hamranhansenhansen

      No, they have already proven they won’t. The reason Nokia has sold almost no smartphones in the US is they were all sold unsubsidized.

      In Europe, the model works because you have multiple carriers to buy a SIM from, all competing to run your phone. In the US, there is just one standard carrier: AT&T. The other networks in the US require special phones that only run on those networks. They’re competing to sell you a phone that only runs on their network and locks you into their network for 2 years. In that case, you might as well get a $400 credit card from them that you pay off over the same 2 years.

      That is also why Google’s ridiculous experiment in carrier neutrality with Nexus One did not work. You were supposed to pay Google $600 for a phone, then choose 1 of 4 models, each of which is tied for life to 1 of the 4 big US carriers. All they did was deny the customer a $400 credit card. The customer was still going to be stuck on just 1 carrier for the life of that device. You might as well pay $200 directly to the carrier and later pay the other $400 if you want to break the contract.

      US consumers have also been trained to think a $200 phone is outrageously expensive, whereas European consumers know that is really a $600 phone. It will take a long time to change that perception. Many advantages will have to be offered and understood by US consumers. The carriers would have to change dramatically, both in technology and in business practices before it would be worthwhile to pay $600 for a phone.

      • This is one of the areas I’m in favor of government regulation.

        Here in Brazil all carriers are obligated to use the same technology and the same frequencies. More that, no phone can be locked to any carrier and if you change carriers you can take your number with you at no cost.

        If this rumor is true, it’ll be great, because i’d rather buy an iPhone from Apple then a carrier.

    • That is the question. Because with this you would pay full price. Another question is whether or not carriers in the U.S. would feel obligated to play. But the trend is moving this way and other than the pipe, the “relationship with the subscriber” is all a carrier has. This cuts that out of the equation.

      • Bigger barrier to this in the US. The AT&T network is the only national network that can run the current iPhone at 3G speeds. Of course, if the rumors are true of a dual-mode iPhone, and the CDMA side could be provisioned the same way, then maybe this would work here.

      • Erik,
        ATT always subsidized the price.
        Do you think Apple simply gave away the 2-year contract requirement for the phone?
        Why would they do that and not have several carrier options.
        No, what happened was they realized the margin was too high, and so lowered the total cost (incl subsidy) of the phone from somewhere north of $800/handset to $600ish (which is where it’s been at since).

      • Erik Schwartz


        Nobody else would take it under apples terms. Apple gave away the 2-year contract to cingular because no one else would tolerate their requirements (re-doing VM, no bundles, apps are not through the carrier).

        Was there a subsidy at launch? Yes, but nowhere near the $425 it is now.

      • @Erik Schwartz

        Most American phone Customers are STUPID. They (including you) think that Carriers pay for you, but the fact is that over the period of 2 years / 3 years (what ever is the contract period) you have to pay more than 4-8 times of FULL PRICE.

      • Why would you pay the full price?
        Your device would be sponsored by Apple rather than the carrier… In Europe (and in the US, if I’m not mistaken), you do have a lot of these national roaming agreements (Tesco, Talktalk, Virgin in the UK for example). Nothing revolutionary. There’s no technological challenges there. Not sure why they have to have a specific sim card…

        The move would be a big game change only if Apple were then refusing to sell their devices to regular operators, which I can see as the next step.

        Personnally, I believe that this will take apple products to the fringe of the market again (like the Mac vs PC) where exclusivity comes at a premium. Except the phone market is very different from the desktop/laptop market with very competitive devices at very competitive prices (Android for example).

        Greed is usually a bad motivation!

      • Notwithstanding American habits over paying full handset price, the point at issue with respect to the technology is unlocked versus locked handsets. This technology moves the onus not from the carrier to the consumer but from the carrier to Apple. The very purposes of SIM cards in a regulatory environment which prohibits locking phones such as Europe is consumer choice. Apple is seeking to manage the consumer in Europe in terms of iphone use the way they currently are here in the U.S. with locked iphone handsets.

        For those with experience travelling internationally and availing themselves of local pre-paid SIMs wherever they visit, there is little better for consumer choice and freedom than the model of unlocked handsets combined with SIM technology. To abdicate that choice and the risk of unwanted roaming charges to Apple hardly seems like an advance for the consumer to me.

    • Dude, they won’t have to pay full price. Americans can buy the phones for full price, but whoever they open a line/contract with will offer rebates.

      At least that’s the smart way of doing it. Who knows what will ACTUALLY happen!

    • Not the full price, but think twice: contracts in Europe start at approx. € 40/Month if you don’t want to pay for the handset. If you pay the full price, you just pay for the contract and not for the subsidized iPhone, because you already payed the full price. Another advantage could be that you’re able to quit every month and change you carried and don’t have to sign the contract for two years.

    • Hamranhansenhansen

      Subsidies have nothing to do with it. That is just accounting. The cancellation fees balance out the subsidies under any model. AT&T could offer you a coupon for $375 off an iPhone at the Apple Store if you sign a $50/month contract with a $375 cancellation fee with them. Then a month later, T-Mobile could offer you a check for $375 made out to AT&T if you sign a $40/month contract with a $375 cancellation fee with them. The subsidy stops being attached to the device but remains attached to the contract. Or, you could buy your iPhone full price and sign a contract with any carrier with a $0 cancellation fee.

      Carrier choice is 100% about technology. The 4 biggest US carriers deliberately use incompatible technologies to provide vendor lock-in, to create 4 overlapping monopolies. The standard networking with SIM cards prevents that vendor lock-in. How the accounting is handled is completely academic, just numbers on spreadsheets. The phone subsidies are just a kind of credit card is all, and with only a $375 limit, very basic stuff.

      • Exactly!!! The standard networking+SIMcards+(unlocked phones, I’d add) mitigates carrier control in favor of consumer choice. Apple however has no interest in selling unlocked phones in the U.S. and an integrated SIM card(given all of the above as in Europe) ONLY serves to garner Apple the control in Europe that typically resides with the carriers in the U.S. Apple could sell unlocked iphones today in the U.S. if operator choice was the issue to be “solved”. That’s not at all the goal of an integrated SIM.

  20. Rob Scott

    Devices are cash hogging and a costly exercise for carriers. Most carriers would prefer to be out of the device game altogether but the fear is what happens when customers chose a device before the network. And with powerful and disruptive companies like Apple carries are fearful hence they contiune to wastw money on devices.