Why Apple's reported shift to eSIM may prove to be bane for telecom providers
The eSIM is virtual, meaning that just changing your phone’s settings would theoretically allow you to switch carriers.
By Bloomberg | Updated:
Agencies
By Alex Webb
Each new iPhone is usually good news for mobile network operators. The latest Apple Inc. device always comes with upgrades that make it easier to play games, watch films and download reams of data. More data means bigger phone bills.
There’s a chance, though, that Wednesday’s arrival of the next generation of iPhones might not be so welcome. That’s because there’s a possibility that Apple could introduce so-called electronic sims, or eSIMs. Even if this doesn’t happen this time around, the shift to the new technology looks inevitable.
Speculation about eSIMs has been rife since Apple complained to the U.S. Department of Justice that Verizon Communications Inc. and AT&T Inc. were colluding to prevent their introduction. The DoJ is investigating.
The classic SIM card is a small chip that’s inserted into the phone manually — making it more awkward to change your mobile network provider. You have to go to a shop to get a new sim or have one delivered physically. The eSIM is virtual, meaning that just changing your phone’s settings would theoretically allow you to switch carriers.
ADVERTISEMENT
It’s almost certain that this would accelerate price competition. Whenever it’s made easier to jump from one operator to another, consumers take advantage and seek better deals. “Churn,” the industry term for customer losses, spikes. That’s what happened, for example, when Spain brought in rules to cut the time it took to change network operators to less than 24 hours.
European chipmaker STMicroelectronics NV dropped a heavy hint about eSIMs at an investor day in May, saying it expected to deploy its own device in a major mass-market smartphone by the end of the year. Whether it’s talking about this year’s iPhone will become known on Wednesday, but it’s hard to see how the mobile phone operators can resist this technology for long given its usefulness for consumers. Apple will certainly argue it that way. It’s already used in some iPads, and STMicro supplies an eSIM for the Apple Watch.
Apple can’t totally dismiss the concerns of the big phone carriers. After all, they spend huge sums on marketing the iPhone, and sell it in their stores. But the California giant is willing to throw its weight around, as shown by the DoJ complaint.
The Rise And Rise Of A Tech Boss: A Look At Apple CEO Tim Cook's Paychecks
1/1
2015
With a total compensation valued at $10.3 million, the bulk of the figure consisted of incentive-plan payments.
2015
With a total compensation valued at $10.3 million, the bulk of the figure consisted of incentive-plan payments.
While the eSIM might reduce some logistical costs for carriers such as Verizon and AT&T, in the longer term it will become harder to differentiate between network providers. As Northstream telecoms consultant Bengt Nordstrom says: “From a user perspective, if you ask what service they’re using, they’ll say they’re an iPhone or Samsung user, not the operator.”
It might make sense for Apple and other phone-makers to keep the classic SIM port alongside an eSIM in the near term. That would give operators time to adapt, while making it harder for them to object.
But the danger for carriers is that the shift to eSIMs moves them further down the path to becoming little more than utilities. Telecoms stocks are already the worst performers in Europe’s Stoxx 600 benchmark index this year.
There are very few people who don’t have a smartphone already, meaning it’s increasingly a battle for market share rather than new users. The prospect of a new wave of price wars is not a happy one.
5 Things To Expect At The Apple Event
1/6
Cupertino-based tech giant, Apple's mega September event is here and we are expecting to hear a lot about the company's most-loved product, the iPhone. It is expected to come with a radical redesign in the form of last year's iPhone X.
However, Apple is not just about the iPhone, there is an entire ecosystem of products, ranging from the Apple Watch, iPad, other accessories and services.
Therefore, expect plenty of news about the Apple Watch, AirPods, and maybe the AirPower charging pad.
That's in addition to all the new software that was announced at WWDC earlier this year.
Cupertino-based tech giant, Apple's mega September event is here and we are expecting to hear a lot about the company's most-loved product, the iPhone. It is expected to come with a radical redesign ..
Read More
An updated version of the iPhone XS, with the same notched, bezel-less, 5.8-inch screen, but with improved internal specs.
Along with the XS, a larger, 6.5-inch version on the lines of the Plus models is also expected. This would mean a bigger screen and larger battery, and it may come with the XS Max moniker instead of the XS Plus.
Both the phones will feature OLED displays, stainless steel frames, and the often-copied Face ID notch, a new A12 processor and more RAM.
A cheaper, 6.1-inch LCD iPhone that would offer the bezel-less display and Face ID of the X and XS phones at a lower price point, replacing the iPhone 8 and 8 Plus as Apple's new "entry" model.
An updated version of the iPhone XS, with the same notched, bezel-less, 5.8-inch screen, but with improved internal specs. Along with the XS, a larger, 6.5-inch version on the lines of the Plus model..
Read More
Apple will be offering a bigger display on the watch for an edge-to-edge design, along with a slimmer size than the previous versions.
It might also feature an integrated EKG that would help establish the health of the wearer's heart and identify cardiac issues early. Leaked images show more complications on the face than ever before.
The Series 4 is also expected to offer an LTE model as well, similar to last year's Series 3, although with a subtler red ring on the digital crown to denote the cellular status.
The new Apple Watch will almost certainly come with watchOS 5, announced at WWDC 2018 which adds automatic workout detection, a walkie-talkie mode, and better notifications.
Apple will be offering a bigger display on the watch for an edge-to-edge design, along with a slimmer size than the previous versions. It might also feature an integrated EKG that would help establis..
Read More
The AirPower charging pad which was shown to be able to wirelessly charge up to 3 at a time may get an update at this year's event.
Apple is also rumoured to have a new version of its AirPods wireless headphones set for this year, featuring a new wireless chip, support for hands-free Siri activation, and a case that would support wireless charging (to go along with the AirPower pad).
Reports were also doing the round that Apple was working on a non-Beats branded pair of over-ear noise-cancelling headphones. And on the more minor side of things, Apple is expected to finally replace the 5W USB charger that has come included with all of its phones with a more powerful 19W USB-C brick that can fast-charge newer iPhones, along with a USB-C to Lightning cable to go with it.
The AirPower charging pad which was shown to be able to wirelessly charge up to 3 at a time may get an update at this year's event. Apple is also rumoured to have a new version of its AirPods wireles..
Read More
We are likely get some final release dates for iOS 12, watchOS 5, tvOS, and maybe even macOS Mojave.
We're not expecting too much to have changed with the software since WWDC - Apple has spent all summer tinkering and polishing things with a deluge of both developer and public betas, so we're mostly just looking to find out when the updates will be making their way to the masses. iOS 12, much like the new iPhones, isn't looking to be a particularly flashy update in terms of features this year - instead focusing on fine-tuning performance, especially on older iPhones and iPads.
But there are some new features: Screen Time, for tracking your time spent on your phone, better notifications (finally), and some fun new custom emoji called "Memoji".
Apple is also updating its augmented reality ARKit framework to the new ARKit 2, which offers the ability to create shared AR experiences.
We are likely get some final release dates for iOS 12, watchOS 5, tvOS, and maybe even macOS Mojave. We're not expecting too much to have changed with the software since WWDC - Apple has spent all su..
Read More
Anything could happen when Tim Cook takes centre stage, which means there's plenty of room for something unexpected to show up.
Could Apple's leaked bezel-less iPad Pro make an appearance? Will we finally see the return of the long-neglected MacBook Air and Mac Mini? A teaser for the upcoming Apple streaming service that's been building up steam all year?
Anything could happen when Tim Cook takes centre stage, which means there's plenty of room for something unexpected to show up.Could Apple's leaked bezel-less iPad Pro make an appearance? Will we fin..
