Carriers Threaten to Stop Subsidizing iPhone Over Embedded SIM Card Rumor

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Posted November 19, 2010 at 1:08pm by iClarified

Some European carriers are warning Apple that they will refuse to subsidize the iPhone if Apple designs an embedded SIM card into the device, reports the Financial Times.

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.

Robin Bienenstock, analyst at Bernstein, said 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". It's thought Apple could see a reduction in sales of up to 12% if this happened.

It was reported late last month that Apple 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 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.

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Carriers Threaten to Stop Subsidizing iPhone Over Embedded SIM Card Rumor

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samK - November 19, 2010 at 11:17pm

apple will literally dump a barrel of oil into the android bonfire if they continue on with this plan. they might as well just sell the iphone unlocked globally without any carriers.

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David - November 19, 2010 at 5:01pm

I always wondered why Apple didn't persuade AT&T to get rid of the SIM card do this after the first generation iPhone was hacked. If they had a two year plus exclusivity contract with AT&T, that would have killed black market for iPhones. Of course, multitudes would have probably moved over to Android. I know I would have.

Me - November 19, 2010 at 4:14pm

Yeah, what if u wanted to take the sim out of the iphone to use another phone for a moment?

Heavy Price - November 19, 2010 at 5:13pm

Evil Apple!

yingie - November 19, 2010 at 6:17pm

Evil Apple? What about the providers who charge by the minute? That bug us with services we don't want? That have a strangle hold over consumers? The providers typically complain that they 'would lose control over their customers' who would have much more choice if Apple applied the embedded sim. Providers should just do that: provide the network. Manufacturers like Apple are responsible for the handsets. Oh, and remember this: Apple may be 'evil' but they still have small market share... they just know how to capitalize on that.

Pesto - November 19, 2010 at 8:54pm

Yingie! GSM and SIM cards are the ultimate way to free consumers from service providers and the phone. I can take any GSM phone and put any provider SIM in it and it works....Same goes for me to take my GSM SIM and use it in anyone of my other phones..and American's think they are the country of freedom!