Apple and the carriers: a rocky road ahead

There is a fascinating story over at Gigaom called Is Apple About To Cut Out the Carriers? which looks at a rumoured intention by Apple to change the type of SIM card used in future phones so that they can be activated by the purchaser via the App Store.

The SIM card will be part of the phone (iPhone 5?) and can be activated after purchase on whatever network you choose without ever having to visit a mobile network store or speak to someone to fill in a contract form. There is a ROM chip in the SIM which contains IT and security data and I was intrigued by this line in the original article- “The model should work well in Europe, where the carriers tend to use the same networking technology and are far more competitive. It also means that customers can roam more easily with the iPhones, swapping out the carriers as needed.”

If this is true, I take the complete opposite view of this rumoured idea. I work in mobile telecoms and can’t for one minute see a point where the networks will like this idea. They thrive on being able to offer a choice of mobile phones to their customers and many customers like to swap SIM cards between phones when the need arises. They don’t want to be locked to a specific phone because it has a particular type of SIM card that Apple has chosen to implement (this sort of happens already with the microSIM in the iPhone 4). This idea also removes the mobile operators from the retail game which is something Google tried to do rather unsuccessfully with the Nexus. And the mobile number and network provisioning would have to be provided by Gemalto (working with Apple on the project) which moves the carrier even further away from the process.

There is a theory that mobile operators shouldn’t be as dominant as they are now and I can see the point, but in the UK, for example, competition is healthy and it works. There is something about this idea that makes me uneasy, if true, and while many will welcome it this doesn’t necessarily mean it will be a good thing. The reason? It simply does not fit with the flexibility mobile users enjoy today- it locks in the user, it limits the flexibility of mobile operators and gives even more power to Apple.