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    Apple iPhone with a SIM Card Offers Multiple Scenarios: Analysts

    By
    Michelle Maisto
    -
    October 29, 2010
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      Carrier opinions of an Apple iPhone with a SIM card remain to be seen, analysts suggest, following a report that Apple and SIM-card-maker Gemalto are creating a special SIM that would allow consumers in Europe to buy an iPhone and activate it through the Apple Website or via an app from the App Store, thus eliminating a portion of the carrier’s role.

      GigaOm first reported the story, citing “sources inside European carriers” and explaining that executives from “various French carriers” have visited Cupertino in recent weeks.

      However, exactly the portion of the carrier’s role, or control, Apple intends to take over is-until the notoriously secretive Apple provides some details-for now unclear.

      “If Apple tries to make provisioning the iPhone easier for consumers, then it could be welcomed by some operators because it improves the set-up experience,” Strategy Analytics analyst Neil Mawston told eWEEK, laying out the various scenarios.

      “If Apple tries to take ownership of the customer further away from operators by owning the SIM card, it could upset some operators,” he continued. “If Apple tries to turn the iPhone into a multi-SIM smartphone, then it could upset some operators because they will lose full control of the customer.”

      Analyst Ken Hyers, with Strategy Analytics, suggests it’s a model that would work well in Europe, where phone purchases are already more removed from the carrier.

      “Typically in Europe you go to a supermarket or the Carphone Warehouse, and you buy a phone, and then you go buy a SIM directly from the operator,” Hyers told eWEEK. “There’s absolutely no doubt in my mind that they can make this work in Europe,” he said, adding that Apple being Apple, it’s a model that the company could possibly even make work in the United States.

      For the European market, though, Analyst Roger Kay, with Endpoint Technologies, agrees it doesn’t sound like a very radical departure.

      Working to get his head around the rumor, Kay suggested that Apple may be looking to “take over just a bit more of the buying experience, in order to control it and have it be an overall better experience.”

      Not out any altruistic desire, he added, but as an additional method of competing in an increasingly competitive space.

      “If they make the user experience a good one, then they’ll tend to get the business,” Kay said, explaing that it could be a way of preparing “for a long-term, competitive race with Android. … It’s another way of makings their brand distinct from the other guys’.”

      What would that mean for subsidies, the reduced rates that carriers offer consumers, and that are said to be largely responsible for the quickly climbing rates of smartphone adoption?

      “If the carrier doesn’t get to handle the handset, it can’t do any clever packaging,” Kay said, “Though it’s kind of the way it already works in Europe. … In Europe, a lot of stuff tends to be less bundled.” While consumers in the United States have become accustomed to toting phones with carrier logos emblazoned on them, “In Europe, your handset is a bit more personal, as opposed to sometimes feeling like something the carrier is lending you,” said Kay.

      Strategy Analytics’ Mawston, however, believes losing the option for subsidies is a thing carriers won’t take lightly.

      “Operators in mature countries that subsidize the iPhone are in a strong position to deter any potential moves by Apple to own the SIM card,” Mawston told eWEEK. “Sales or profit margins of the expensive iPhone would quickly slow down if operators removed their subsidies for the iPhone and pushed up headline retail prices.”

      Until more details emerge, Apple fans can instead look forward to the once again confirmed rumor-this time thanks to Fortune-that a Verizon iPhone is nigh.

      Michelle Maisto
      Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University, and in her spare time obsesses about food. Her first book, The Gastronomy of Marriage, if forthcoming from Random House in September 2009.

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