Apple SIM has great potential, but widespread changes will take time

Apple SIM lets iPad users choose between data plans from different operators just by touching the screen

New Apple iPads allow users to choose between data plans offered by different cellular carriers without having to obtain a separate SIM from each. But that's only the beginning as embedded SIMs like the new Apple SIM have the potential to change the way all devices connect to cellular networks.

The new iPad Air 2 may be thinner and faster than its predecessor, but the introduction of Apple's own SIM card is the improvement users should be the happiest about. The so-called Apple SIM lets users choose from short-term plans from carriers in the U.S. and U.K. right on the cellular versions of the iPad Air 2 and mini 3.

"So whenever you need it, you can choose the plan that works best for you -- with no long-term commitments. And when you travel, you may also be able to choose a data plan from a local carrier for the duration of your trip," Apple said on its website.

If the SIM takes off on a larger scale, that and support for 20 LTE frequency bands will make the iPads near-perfect travel companions. The success of the Apple SIM at home and abroad will depend on the company's ability to convince operators it's a good idea. Only four operators are on board so far: AT&T, Sprint, and T-Mobile in the U.S., and EE in the U.K.

"Apple is the only company that has the gravitas to be able to pull off this kind of deal. Other manufacturers will look on in complete awe, because it just further underlines the strength of position Apple has," said Ben Wood, director of research at CCS Insight.

That Apple started with the iPad as opposed to the much more important iPhone shows it's moving forward with caution. On paper, this is something operators would be expected to resist at almost any length. However, operators have largely failed to get users to connect their tablets to cellular networks, which means they have little to lose, according to Wood.

"Operators see this as an opportunity to get more revenue by taking this more flexible approach. Because they have tried everything else and the reality is that it hasn't really moved the needle," Wood said.

While the Apple SIM is still a physical card, industry organization GSM Association bragged that its embedded or soft SIM spec is finally starting to take off in the M2M (machine-to-machine) sector. Operators such as AT&T, Etisalat, NTT DoCoMo, Telefónica and Vodafone have adopted it.

The same technology could be used on smartphones and tablets, allowing users to switch between different operators and data plans just like with the Apple SIM. But making that happen will be far from straightforward.

"There are major differences between a data SIM and a full voice and data SIM, where you have huge complexities in how it's managed. And equally operators remain in a strong position because subsidies are such a key part of that offering," he said.

The Apple SIM may well be part of a very long journey towards embedded SIMs on smartphones, according to Wood.

The introduction of embedded SIM technology is for now about reducing M2M connection costs. The use of traditional SIMs for transportation, utility metering and other applications can be problematic, as devices are often remotely located and hermetically sealed. It also allows for over-the-air operator provisioning, which is really useful when you have to manage a large fleet of vehicles, for example.

Here the operators have again had to get on board even in they see embedded SIMs as a threat.

"In order to be able to support global deployments of connected cars and consumer electronics you need this capability. It's a necessity to build a market," said Matt Hatton, director at Machina Research.

Send news tips and comments to mikael_ricknas@idg.com

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Mikael Ricknäs

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