Apple is working with Gemalto to create a SIM card for the iPhone, according to GigaOm. A model in which the contract was with Apple, not the carrier, could change everything.
Apple is working with Gemalto, a manufacturer of SIM cards, to
create a special SIM card for the iPhone, according to an Oct. 27
report from GigaOm
. The Website cited several sources from inside several European carriers.
The integrated SIM would enable customers to purchase iPhones
directly from Apple, whether in-store or over the Web, and to choose
their carrier at the point of purchase. Reportedly, the activation of
the smartphones-normally the role of the carrier-could be accomplished
via a download from Apple's App Store.
The Gemalto SIM, reports GigaOm,
...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.
With Apple providing the SIM and activation, the customer contract
could be with Apple, not the carrier, which would eliminate much of the
carrier's muscle and guaranteed two-year revenue, as well as create
more options to customers-and revenue for Apple.
If successful and eventually brought to the United States, the model could let Apple succeed where Google failed with the Nexus One
, which it tried to sell directly through its Website.
"Unlike with the Google Nexus One, customers could go to an Apple
store and check it out... and walk through activation at the Genius Bar,
instead of trying to do it on the Web," Ken Hyers, an analyst with
Technology Business Research (TBRI), told eWEEK. "I can see this
working in the U.S., and it would be a real game changer. The carriers
currently have had a strangle-hold on phone distribution, but Apple
really does have the heft, the ability, to shift the market."
While handset manufacturers traditionally teamed up with software
makers, Apple made the move to offer-and control-both, a trend that
Nokia, with MeeGo, Hewlett-Packard, with webOS, and Samsung, with Bada,
have worked to copy. Taking on part of the carriers' current role would
be consistent with Apple's desire to control all aspects of the iPhone
Feeling their control waning, the top five operators in Europe are
currently in discussions to create a new operating system, which would
provide them with more control, as well as additional revenue through
applications. Were Apple to begin infringing on their turf with its own
SIM, the move would provide greater impetus to pursue their own OS, as
well as to more aggressively court other handset makers, says Hyers.
"The potential impact for U.S. operators could be huge, since Apple
will hold a significant amount of leverage and be able to negotiate
preferential pricing. Whether it actually passes on those price-savings
to its customers is an open question, but it would have an opportunity
to do so as needed to fend off competition from Android OS devices and
RIM BlackBerry," explains Hyers.
While Apple dominates the U.S. smartphone market, data shows Android
to be quickly gaining on it. According to comScore, from July through
August, Apple's iOS ran on 24.2 percent of smartphones, while Android
ran on 19.6 percent-putting the newcomer within 5 percentage points of
the leader. In April, the report continued, iOS held a solid 25 percent
of the market, showing Android to be eating away at Apple's lead.
If Apple is already feeling competitive pressure from Android, a new
model with the Gemalto SIM would likely force the market to further
team up against it.
"I think that if Apple moves to this model," said Hyers, "operators
will more readily embrace other handset vendors in an effort to reduce
Apple's influence in the smartphone market."