The Real Story behind the Apple SIM

Apple’s Nano Extra in Cellular iPads Is a Significant But Small Step

As the dust settled at the end of Apple’s webcast to announce new iPads and Macs, I stumbled across what I thought was even bigger news than the thinnest iPad to date: the Apple SIM that will be included in new cellular iPads.

Although it chose not to even mention it in the presentation, Apple quietly revealed it had secured a deal with four operators (three in the US and one in the UK) to ship the latest generation of LTE-capable iPads with a SIM that can be connected to multiple networks.

However, before I share my thoughts on that, I must stress one very important point. Despite numerous ill-informed reports on the Web, in the media and on social media last night and this morning, it’s most definitely not a soft SIM implementation.

Consumers buying an iPad where the Apple SIM is available will find a standard nano SIM in the relevant slot which can be removed and replaced if the owner so wishes. It’s not a virtual SIM, it’s not an embedded non-removable SIM, it’s just a standard SIM. The clever part is that this SIM can be associated with multiple operators — and probably more in the coming weeks and months.

The reason for the confusion is that over the past few years it’s been widely rumoured that Apple wanted to transition to a soft SIM solution. There are already standards that have been agreed to do this, though primarily for M2M implementations. The Apple SIM might be a small step in that direction but full soft SIMs are a very long way from where we are today.

So what exactly is Apple offering and why are operators agreeing to it when — at face value — it looks like a dangerous shift in power from operators to Apple?

Apple and operators both know that the number of cellular-enabled tablets that are actually connected to a network is embarrassing low and they needed to come up with a way to fix the problem. Most people just don’t want the hassle or expense of signing up to a contract to get a second SIM for their tablet. The Apple SIM takes the pain out of the decision. The SIM’s already there and if you want to light it up, you just follow the on-screen instructions and get connected.

Funnily enough, Apple’s SIM isn’t too dissimilar to the ones that used to be bundled with laptops a few years ago, but with one small and very important difference: owners can decide which operator they’d like to connect to rather than having to have a separate SIM for each one.

The operators involved in this deal have clearly realized that some revenue is better than no revenue. Yet Apple’s the only manufacturer that could have done this. Other device makers must be green with envy. I’d also bet there are few rival operators in the UK that are pretty gobsmacked that EE managed to pull this off. You can be sure that EE will see a jump in its share of connected tablets in the UK. The number will be boosted by visiting US owners of the new iPad, too.

For consumers the new SIM has some significant advantages. If you go somewhere and find your network has poor coverage or no 4G, you can just switch operators, making it ideal for a business trip or a weekend away. Furthermore, if you’re travelling between the UK and the US (and aren’t signed up to 3’s Feel at Home plan) you don’t have to worry about huge data roaming costs or trying to purchase a local SIM for the iPad on arrival: just switch to a local operator.

The easiest way to think of this is as a simple alternative to paid-for Wi-Fi. Rather than paying an exorbitant fee to access the hotel Wi-Fi network, you can just sign up to the cellular service, and arguably with less hassle.

The bottom line is that this is a clever implementation by Apple that has corralled a few operators into making connecting an iPad to a cellular connection as easy as paying for 24 hours of Wi-Fi in a hotel.

Despite all the speculation and hype we’re nowhere near an iPhone with a virtual SIM that can be connected to any operator in the world. The technical and commercial complexity of a full voice and data subscription is very very different from a data-only SIM in a tablet. Let’s not forget that operators will do absolutely everything in their power to resist it. I’m not saying a soft SIM won’t happen, but commentators caught up in the current frenzy about Apple’s nano wonder should examine it a little more closely before declaring the end of an era.