Apple has reportedly moved to address operator fears by saying it will not include embedded SIMs in the next version of the iPhone. According to a Financial Times report, which cites people familiar with the situation, Apple has told operators it will not use the technology in the iPhone 5 – scheduled for launch in mid-2011 – but has not ruled out using embedded SIMs in future versions. The use of an embedded SIM by Apple is seen as a threat to operators as it would mean customers could buy the smartphone at an Apple store, and then remotely activate the handset after selecting a network provider – effectively cutting out the operator from the sales process and making it much easier for customers to switch networks.
Last week, the same newspaper noted that three of Europe’s four largest mobile operators – Vodafone, France Telecom and Spain’s Telefonica – were warning they could refuse to subsidise the iPhone if Apple pressed ahead with plans for embedded SIMs (Deutsche Telekom is thought to be neutral on the issue). Withdrawal of operator subsidies, which tend to lock in customers to a lengthy contract, could mean that the device is sold at its full wholesale price (around US$600) and could potentially damage sales. However, the report notes that if Apple is able to secure a wholesale agreement for network provision with an operator, the use of embedded SIMs will allow it to operate as an MVNO.
