Submitted by Well, this is fascinating. There have been rumours going around for a while now that Apple is working with Gemalto on an integrated sim card, allowing customers to choose their own carrier and then activate the phone through Apple. European mobile phone carriers aren’t particularly pleased with this.
It’s a conundrum. Do I hand over more control to Apple, or do we keep things the way they are? Many Americans would probably like to see their carriers taken down a notch, but at least here in The Netherlands, pro-consumer laws governing mobile phone service and the accompanying contracts are solid, and as a consumer, it’s quite easy to switch carriers. Other forms of control – crapware, capability limitations – are rare too, as far as I can tell.
In other words, I personally do not see much reason to transfer control from the carriers to mobile phone makers such as Apple, but then again, I’m sure many Americans would disagree, and maybe some of my fellow Europeans as well. In any case, carriers in Europe aren’t pleased with Apple and Gemalto’s plans.
“The operators are privately saying they could refuse to subsidise the iPhone if Apple inserts an embedded subscriber identity module, or Sim card,” Andrew Parker reports for The Financial Times (a dinosaur behind a paywall, sadly), “The operators are accusing Apple of trying to gain control of their relationship with their mobile customers with the new Sim.”
If carriers indeed were to refuse to subsidise iPhones, Apple’s sales would obviously take a major hit. Few people pay the full price for a smartphone, relying on contracts instead – those people are just going to pick something else instead of an iPhone.
Not every provider will remote subsidies. Those that don’t will get a lot more customers because there are a lot of people have are a LOT more loyal to iPhones than they are their cell / data provider.
They WILL cave in. It’s only a matter of time. Everyone was shocked with what AT&T gave to Apple as far as full control over the app store, etc. It’s only the beginning.
I doubt it. This move by Apple would threaten the very core of the carrier’s business model, and remember, there are only a few carriers per country, and they’re generally all owned by the same companies Europe-wide. If they agree together – as the FT states – to cease subsidies – Apple is in trouble.
I second that, and add that at least here in France, agreeing on financial matters and preventing potential competitors from messing with their business is something which mobile carriers are *really good* at.
What’s happened when the government recently decided to introduce a fourth carrier has only shown it too well.
Edited 2010-11-19 23:47 UTC
I don’t understand this, can someone explain this?
How is the SIM card being provided by the carrier vs Apple changing anything.
(Other then a customer likely to stick with same carrier since they have their SIM already.)
It’s not quite that. If I understood this story well, we’re talking about a sort of rewritable SIM card. Apple only has to remotely reprogram that card for you to switch from one carrier to another.
Presently telcos lock you in with their SIM for the period of the contract – the device is locked to their SIM. If you choose to switch carriers during your contract period you have to pay them an out fee to unlock your phone. This option would be like selling an unlocked phone that Apple could, upon request, move to a different telco. It’s like going from and iPhone to some Android based phones, they both have lock-ins, it’s the extent of the lock and who controls it that changes.
At least here in Canada still seems like they would maintain a fair amount of control with their normal 3 year contracts and high cancellation fees.
3 years!?. Wow!.
Spanish contracts are on average of 18 months and from the first year on you can generally change telecom without having to pay any fee.
Don’t forget.. We don’t get our phones unlocked when we get out of our contract.
Rogers and Telus (I’ve tried) will not give out the unlock codes. The usual way to unlock is to have someone online give out one based off an IMEI number.
New Zealand and Australia are two countries I know of which have contract phones but don’t have SIM card locks – just because you have a contract doesn’t mean that it has to have the SIM card locked because you’re still going to have to keep paying the contract even if you destroyed the mobile phone or moved the sim from one device to another device. The idea that some how the business model is destroyed because of the lack of SIM lock in simply ignores how a contract operates and the fact that you keep paying regardless of whether you use *THAT* particular phone you pay for. If you want to get out of that contract then you have to pay to get out of it – normally paying the difference between the full price and subsidised price plus a small penalty.
It is the same in Germany. Sim lock is only used for pre-paid plans, where you can opt out at any time by simply not loading new money onto the phone.
The data plans an iphone ships with are not affected by that.
Edited 2010-11-20 21:07 UTC
Even for prepaid’s in New Zealand you purchase the phone out right and it isn’t SIM locked – of course the $99 phones are the very low end Nokia phones designed for third world markets but if you really want a cheap phone that you fully own it is quite easy. Personally I’d sooner see all phones lose their subsidies and then when you sign up for a contract you get a rebate based on how long the contract is for – for example a 24 month contract might yield a $200 rebate effectively making some phones free.
Canada is the same way, at least with GSM phones.
Telus and Bell, with their old CDMA phone, locked the phone number to the phone to the contract requiring lots of hoop-jumping and paperwork to swap phones mid-contract.
Rogers, though, the phone number is locked to the SIM and nothing else. What you do with the SIM is up to you. Nothing stops you from popping the SIM out of one phone, popping it into another phone, and making calls/transferring data as per normal. We’ve even used that to transfer phone books between phones when the wife has lost her phone. We regularly trade phones when hers is in the shop, so that I use the crappy loaner.
Don’t know how Telus/Bell GMS/HSPA SIMs work, or how any of the PAYG companies work with SIM cards.
I’ve never understood the reasoning for keeping the SIM card internal to the phone, or locking a specific SIM to a specific card.
I’ve NEVER experienced what you’re talking about with Bell/Telus when switching phones mid contract.
I had gone through about 10 phones on the CDMA network. You can call into 611 and a rep will swap it (free, if you sweet talk them). They also have an online site to do it – but it costs $10.
It still sucks, but you’re by no means locked to a single phone for your contract.
You’ve been lucky, then.
Everyone I know that used Telus/Bell before their HSPA network roll-out had a horror story to tell about switching phones mid-contract. Especially with their “you can’t transfer contacts/settings/etc between phones, but we can do it for $25 if you want” options.
It’s one of the main reasons I’ve stuck with Rogers for so long. Their TDMA network was a heck of a lot better than whatever Telus used. And their migration to GSM was very smooth. And their policies around SIM cards have been very hands-off.
It’s just too bad their selection of “good” phones sucks. It’s still hard to beat their pricing, but without good phones (and no, I don’t consider having the BB Torch and the iPhone4 “enough” when they have 0 Android phones worth using) it’s getting harder and harder to stay with them.
This is not about the North American market though.
Ah, but even if Apple didn’t do this, as arstechnica points out, it may not matter:
The carriers may have more than Apple and the iPhone to worry about, though. The GSM Association, which helps define the standards used for mobile communications, announced Thursday that it was forming a task force to develop a standardized programmable SIM module expected to be used in devices launching in 2012.
http://arstechnica.com/apple/news/2010/11/embedded-sim-could-cause-…
This is a long fight.
But the outcome is almost certain.
The bit pipe owners will become mere utilities competing on price per bits and nothing else. The idea that bit pipe owners (carriers, cable companies, etc) should have any power over the end user or be involved in delivering anything other than a bit pipe will come to be seen as an anachronism.
Apple is the strongest placed player to break the power of the bit pipe owners. Their fight has been complicated by the emergence of Android which has temporally assisted the bit pipe owners to resist Apple’s attack. Apple has manoeuvred through and around the bit pipe owners power but its strategic direction is set – to destroy the power of the bit pipe owners. This latest manoeuvre is part of the bigger game, a tactical shift, but the war continues. Let’s all hope that Apple wins and the bit pipe owners power is broken. Then the bits can flow freely.
Except when those bits are critical of Apple, contain rumours about an upcoming product, nude people or pornography, or if those bits compete with Apple’s bits, or… Or…
At least our carriers/ISPs here in The Netherlands don’t care about what bits they send through, and at least our carriers/ISPs have actively been fighting big content and other anti-consumer, anti0privacy, and anti-freedom forces.
Carriers/ISPs > Apple.
Well, a lot of people really don’t mind if a single company has sight and control on a large part of their life, so this might work anyway…
Examples are many. In the tech world, one may think of…
-Google, Facebook (obviously)
-Apple (considering how much information on a single individual can be extracted from an iTunes account)
-Microsoft (most of what happens on a PC nowadays goes through Windows and other black boxes from them)
Edited 2010-11-20 15:28 UTC
Once the power of the bit pipe owners is broken it will stay broken.
Then you can choose whether you want a curated experience or not.
No matter how big or powerful Apple get there will always be alternatives to Apple’s curated model. Nothing Apple does comes close to the power and restrictions that the bit pipe owners currently have.
Try buying just one cable TV channel – the one you want – from a cable company. Impossible. In the future such restrictions will seem strange and weird.
If you want digital freedom then support those attacking the power of the bit pipe monopolists, even if that means supporting someone like Apple that you may have other differences with or whose product model you may dislike.
The key battle for digital freedom now is that to break the power of the bit pipe owners, everything else is secondary.
This view of the situation is maybe a bit optimistic.
In the game of thrones that the telecom people play, getting rid of an enemy often means helping another one to get stronger, if it’s not done right.
As far as I know, most ISPs don’t apply censorship on the Web we see, nor do they force us to browse the web exclusively through their home page. This is in contrast with the App Store model : you’re forced to go through it if you want to install something on an Apple device, and content is censored on it for frivolous reasons (because a breast is shown somewhere, because Apple has a bad relationship with the brand creating it…).
It’s a matter of opinion, of course, but I think that such censorship is a much more serious matter than monthly caps on bandwidth and DRMs on video. The latter are bad, obviously, but they do not violate basic constitutional rights.
Try this. Contact your cable TV company and tell them you don’t want any bundles, you only want three particular channels, and ask them how much that costs. The answer you will get of course is fuck off.
You buy TV their way not the way that every single cable consumer actually wants to buy TV.
That’s the bit pipe owner’s power that is threatened by the rise of the net in your pocket, the net everywhere.
Who will break that power – Google?
Microsoft?
FaceBook?
Or Apple perhaps.
Like it or loathe it Apple is the best hope we have of seeing such power broken, nobody else is even trying.
We are talking ISPs not cable companies, but point taken; where the two overlap, cable companies are often pretty bad. Where internet providers have succesfully challenged the old cable companies you typically have better service and better rates.
Edited 2010-11-22 00:15 UTC
Maybe it’s true in the United States, but in France (maybe in the EU in general, I don’t know) it’s illegal to sell things in bundle without selling them separately to customers requesting it, even though companies are not forced to advertise this possibility publicly.
If I go to the supermarket, see a pack of soda can, but only want one, I can open the pack and take one, then go at the entry of the shop, and they’ll be forced to accept it. This also applies to more immaterial things : ISPs would love to sell us all Internet+TV+Phone plans, but internet-only plans exist for a reason.
As for the rest… Well, I think the other person proposing an explanation of this in this thread has a better chance to be right than you. Apple is a big company. Company’s primary goal is to get money, and since the invention of shareholders they need an ever-increasing flow of money. This need for a flow of money in exponential growth is a destructive cycle which at some point always end up being harmful to customers. There’s no room for the idealistic guys you imagine at Apple in a world of money, only for some birds of prey who run circles above us in a more or less subtle fashion, though we don’t know how they’ll rip our internals off yet.
The exponential monster requires an ever-increasing set of compromises to feed him, and with things like iTunes and the App Store I think that Apple have shown how much they nowadays care about customer freedom reasonably well.
Edited 2010-11-22 07:17 UTC
I live in London. It is impossible to buy individual channels without buying a whole bundle of channels (20 or 30 at a time). The result is that 90% of the channels on my TV I don’t want and never watch.
I don’t think that Apple’s key role in destroying bit pipe owners power will come from idealism. It comes from their business model. Apple want to control the whole stack that goes into their products because they want to make (what they consider to be) the best possible products. That means controlling all the ingredients. This doesn’t mean they want to control any given ingredient in general, it’s not a monopolistic model like say Microsoft, they don’t want to control the ingredients that go into other people’s products.
Apple’s view is if they can control all the ingredients that go into Apple’s products they can make products that will beat the competition. Given their track record that’s a not unreasonable business strategy.
So when Apple, which is very powerful, comes up against entities that seek to control key ingredients for their products a fight will develop. That fight may happen over time and Apple may avoid open conflict at certain stages for tactical reasons (hence the possible retreat on the SIM issue) but from Apple’s point of view this is just a manoeuvre in a long war and one they intend to win. Personally I think Apple will beat the cable TV companies first and relatively easily in the next few years. The phone carriers will be a tougher opponent but I think they too will be beaten.
There we agree
Problem here is that apple just wants to take away the power and use it itself, unless the entire handling is done by a third party I would not trust either of them. The status quo here at least is that if you travel you just get yourself another sim card and drop it into your phone, if you have an unlocked phone which is easy to get.
What now happens then is that you are dependend on the current mood of uncle Steve for that, do you really want that?
But can they force thier (Mobile virtual Network Operators) MVNOs to stop the subsidies, here in the UK there are a plethora of MVNOs most nowhere near as big as the network providers but they provide competitive rates. If they were to take on the iPhone then the network providers are up sh*ts creek.
ps – OSnews, FT is behind a pay wall but if you register (free)you get to read 3 articles a month.
for Apple.
Let’s take T-Mobile. Thay have plans for both Android & iPhones. For most people having 900 (iPhone) or 1200 (Android) minutes is meaningless. By this I mean that they’ll never get to 900 mins let alone 1200 in a month.
So why is the Android phone £5.00 a month more than the iPhone.
Wasn’t the Android proposition one that it was going to be cheaper than the evil iPhone?
So Apple will be able to sell you an unlocked iPhone. Already, you can buy a sim card from any of the UK networks and use it on any plan you want probably saving you a whole wad of cash over a two year period.
This is just the net step. Now you won’t need a different sim card. This will (I hope) lead to users being able to switch networks and take their phone number with them. Could this be a little more power to the user? If so then rock on Apple.
Edited 2010-11-19 22:53 UTC
This is already possible in most of Europe, if not all, regardless of carrier. Anything else is really so last century. You should really start to demand better consumer rights, rather than thinking changing the leash from carriers to Apple wil gain you in the end.
I have kept the same number for more than 10 years, although having switched carriers 7 or 8 times. (For about 4 or 5 of those I used it for work, and it was paid for and hence legally owned by my employer.) Changing is easy, you only need to inform the new carrier and they have to handle the transfer of the number from your old. And send you a new sim card.
Same with me Morty. I’ve had the same number for a little over 12 years now, had 2 simcards replaced (lost and a broken) and tried every big carrier in the UK as well as a few little ones that poped up and have kept the same SIM card AND phone number when I transfered to them, and I’m not even on contract anymore, just PAYG.
What annoys me is when people get a new phone each year and they’re like oh yeah sorry you couldn’t contact me for the last few months… here’s my new number… and I’m like WTH just keep your number!
Of course it falls on deaf ears. They dont want to know.
I think Apple setting up the transfer of the number would be great, stop people changing to new number every 12months.
For anyone else who wants to keep their number, the process is pretty easy. You get the PAC code from your old provider, and forward it to your new provider. At least thats how it is setup to work in the UK.
I can only assume Apple is wanting to roll the same experiance out over Euroland for everyone else.
Edited 2010-11-20 12:20 UTC
cant we do that already.
in sweden when i switch carrier i always keep my number.
it really is not somthing that you need to keep your sim card
That’s hard to reconcile with Apple’s current business model. They don’t want empowered users, they provide a carefully controlled experience that favors Apple.
I don’t doubt they would like to play the carriers off against each other, they had no qualms about doing that in Canada for instance, but any benefit to the customer is incidental. Their model is built on locking customers in.
An internal SIM card allows Apple to control which carriers will be permitted to “support” the iPhone on their network, which is counter to the whole point of the GSM standard. It will also discourage users from swapping to and from a competing handset (ie. I used to simply swap my SIM between my 3GS and Nexus One at will), and by tying the process to iTunes could be used to lock the phone to a user account to discourage reselling used handsets. They wrestle many of the providers into providing hefty subsidies to ensure that iPhone users are able to easily upgrade their models on a regular basis and would probably prefer that the upgraded handsets are retired rather than recycled.
Unlike Google, who basically sees the mobile platform as a method of driving users to online services, Apple’s business is built around selling hardware a sweet margins and using their online services like iTunes to lock customers to the hardware. Apple doesn’t get a piece of the pie when someone sells their old handset to get a new one.
Apple’s expertise is providing user experience, but that should never be confused with empowering users. My speculation aside, this is a move that simply gives Apple too much control over the user’s hardware. The existing SIM card paradigm empowers users with choice when available, Apple’s move will seek to limit that.
Just my 2c.
In the US the contract price is the same with a subsidized phone vs a non-subsided one so always take the subsidized phone since it is effectively free. I get a new phone every two years even if I don’t need it, I just want new free batteries.
If contracts were cheaper without subsidized phones, I’d stop doing this. But I don’t get to make that choice.
On Optus, in Australia, the contracts are no cheaper, but include more call value for people who bring their own phones.
Actually, T-mobile does offer a reduced price without a contract – $49.99/mo vs. $59.99/mo for a family plan w/ two lines, 700 min/mo.
In the US the contract price is the same with a subsidized phone vs a non-subsided one so always take the subsidized phone since it is effectively free. I get a new phone every two years even if I don’t need it, I just want new free batteries.
Here in Finland it’s completely vice versa; contracts without a phone can be as little as a euro a month, and if you want a phone with your contract you have to pay 30 or 40 euro a month. So obviously, if you have a working phone or have bought one from somewhere else where it’s cheaper then it’s also obviously cheaper to just get a contract without a phone.
This will (I hope) lead to users being able to switch networks and take their phone number with them.
This has been possible here for years now. When you open a contract they always ask if you want your old number transferred to them and if you do they’ll take care of all that’s involved. It works even if you make the contract online on their website. It really couldn’t get any easier.
Edited 2010-11-20 04:56 UTC
Yes keeping your number (MNP – Mobile Number Partability) when switching operator is old here in Sweden as well and I believe it is commonly used. (Although we seem to have very slow system/rules according to wiki.)
And what I can see on wiki it should be possible in US as well:
http://en.wikipedia.org/wiki/Mobile_number_portability
Not so with T-mo. Their plan is cheaper per month if you buy the handset up-front. They call it the “even more plus” plan as opposed to the “even more” plan, and it has the obvious benefit of being a non-contract plan. You can bail at any time.
Yes, I believe they’ll cave in as well. They will take their share offered by Apple. All those providers are fighting for a share of a small piece of cake and they’ll take every tiny bit they can get.
There are two things a SIM does. They store a small amount of data, i.e., your contacts, and they have a unique fifteen digit number. This number tells the telco which account that phone is using. On a daily basis, I think I must replace half a dozen SIMs that have stopped working for some reason or other (for those who don’t stalk my comments, I work in a phone shop). In my opinion, we should replace SIMs with username/password logins. How cool would it be if you left your phone at home and didn’t want to waste someone else’s credit: Just log them out, search for your carrier and log in, suddenly you’re on YOUR phone account. Or if you buy a new phone, just log in, no fuss. It just removes one more thing that can fail if we were to dump SIMs entirely and instead use usernames and passwords.
I can see a real problem with this: security. I can imagine a huge market in stolen usernames/passwords. If you think it’s bad already with disputes about carriers overbilling customers, just wait until it’s possible to steal login information. I’m not sure I’d even want to have a cell phone under those circumstances, unless I used a pre-pay plan (which would limit the damage if I got hacked).
SIM cards may wear out eventually, but it takes a long time. I’ve never had a SIM card wear out on me – my current one is 3 years old. A friend of mine did have it happen, but the card was 8 years old and replacement was free. How many electronic devices last that long?
Edited 2010-11-20 01:00 UTC
Honestly, I think most phones are frying SIM cards, because I regularly see the same customers back every month or so, their SIMs not working for some reason or other, and I haven’t had to replace mine since I got this phone number four years ago.
As for security, it’s already possible to mimic SIMs, I think, even if it is a little tricky.
I have the one and the same SIM they gave me 6 years ago. Still works.
That makes two of us, mine’s almost 7 years old now.
The latest mobile offering in Malaysia is a 4G implementation. And it is simless I believe. Just use username/password to log in. I’ve registered early. I don’t really have problem with that. But of course there’s always the danger of the telco being hacked…
.
Edited 2010-11-20 17:55 UTC
While it’s possible to clone SIMs and what not, two-factor authentication (something you have, the SIM, and something you know, the PIN) will always be more secure than one-factor authentication (something you know, the username/password).
The SIM pin is data stored on the individual SIM though. To steal serrvice, you don’t need a full copy of the SIM, you just need it to announce the sam SIM number to the network, which you can read off the physical card itself.
Activating thru Apple or not, you still need a plan with the carrier in order to use their network.
It makes it easier to change carrier? Really? I can already switch carriers to my hearts content simply by swapping out the SIM. Heck, I could even get a dual-sim phone if I wanted. How does involving Apple improve anything?
This would be very nice!
I fail to see how this will hurt the carriers, Apple would have to pay the carriers to have something to activate.
However, it would probably be bad for the consumers, now you can use different SIM cards in different countries, or one SIM card for work and one for personal use.
My guess is that this will be much more complicated if you have to involve Apple to remotely reprogram your built in SIM. I could even imagine that there would be some fee involved. Either to Apple or to the carriers, or perhaps to both Apple and the carriers.
Seriously, the change locks you into Apple too – since you cannot pull the SIM and switch devices. You’re stuck with getting another SIM or getting another phone from Apple that support it.
As a consumer/customer this is not something I would want.
For instance, my Motorola v180 had a GSM/2G SIM with it. After I got my Nexus One, I simply asked for GSM/3G SIM, switch it out, and was on my way. If I wanted to switch to T-Mobile, I could just switch the SIM.
With Apple’s proposal, I’d be locked into whatever SIM came with the phone, and only that phone or buying a new phone from Apple. Thanks, but no thanks.
Even here in the USA, I’d side with the carriers on that one as it’s no better than what Verizon does for their phones.