By Jared Newman | Thursday, October 28, 2010 at 9:48 am
Rumor has it that Apple is secretly building a SIM card as a way to handle all European iPhone sales and activations on its own.
According to GigaOM, this would allow Apple to sell smartphones directly in Europe. Customers would be able to activate their phones through the Web or at an Apple Store, with no need to ever visit a wireless carrier.
Naturally, the discussion has shifted to whether Apple will try to use its own SIM cards to weaken wireless carriers in the United States. As MG Siegler at TechCrunch notes, crazy demand for the iPhone gives Apple a lot of leeway to push carriers around. Once LTE networks are up and running, Apple could sell its own SIM cards instead of locking customers into specific carriers.
It’s a nice concept, but in the United States, I don’t think cutting out the wireless carriers is in Apple’s best interests.
Like all smartphones sold in the United States, the iPhone relies heavily on a carrier subsidy for its $200 price tag. Without it, Apple wouldn’t make as much money unless the phone cost hundreds of dollars more, at which point many consumers would not be interested.
Subsidies have nothing to do with the technology inside the phone, and everything to do with business. I’m sure Apple would love for its iPhone users to upgrade every year, instead of every two years, but there’s no point without the generous subsidy payout from AT&T. I don’t think any carrier is stupid enough to sell an unlocked iPhone at a subsidized price, so it behooves Apple to stick with the status quo.
To me, the rumored Apple SIM card is as simple as it sounds. Europe is a chaotic market, with many carriers across many countries, and the SIM card would present a way for Apple to control the entire sale, from purchase to activation. In the United States, you can already get that experience at an Apple Store.