Written by Aditya Garg
Apple is set to disrupt yet another industry. But, what new product has it launched this time? The iPhone 6? A new iPad? The Apple Watch?
None of the above.
Rather, it’s a small innovation that has implications for the entire telecom industry – the Apple SIM. Though it received little fanfare at Apple’s product presentation in Cupertino, the reprogrammable SIM card built into the iPad Air 2 and iPad Mini 3 allows users to seamlessly switch between carriers, not only giving consumers more choice but also allowing them to easily use their devices abroad without having to hunt for a local SIM card.
“This is definitely a trend in this industry,” said a T-Mobile Spokesperson in an email interview. “We’re moving towards more openness and more freedom for consumers…its very Un-carrier.”
However, Mobile Analyst at PC Magazine, Eugene Kim, is a little less optimistic about the prospects for the product.
“Apple SIM, while certainly innovative and undeniably convenient, likely won’t have any significant impact on the telecom industry,” he said. “Tablet data plans typically get lumped into the current model of single data buckets for users’ multiple devices or family groups … as such, I don’t foresee many people jumping from carrier to carrier that often.”
Admittedly, the Apple SIM has run into a few notable roadblocks. While T-Mobile and Sprint, have signed up to take part, Verizon has refused to participate. Also, even though AT&T has signed up to take part, there is an interesting caveat – if one chooses AT&T on their device, they are essentially locked in with the carrier, thus ruining the original purpose of the SIM.
In response, AT&T Executive Director of Media Relations Mark Siegel, simply said, “These are what we call unlocked devices – you can change anytime. We are just changing what you have to do.”
Verizon could not be reached for comment.
But it’s not surprising that the nation’s two largest carriers are not participating.
“Ultimately, I think it’s safe to say that Apple SIM, in its current tablet-only iteration, will not decrease the power of mobile carriers in the U.S. in any significant way,” said Kim. “The power is in the coverage, and Apple SIM doesn’t change the current hegemony of large carriers like AT&T and Verizon.”
Nevertheless, many analysts say this is also a precautionary move. Should the SIM ever be incorporated into the iPhone, consumers would have less motivation to buy phones from carriers and it would be harder for the carriers to retain customers. It would force them to offer better pricing options.
There lies the true potential for the product. But the question remains, why has Apple remained so silent about the device?
While Apple could not be reached for comment, Associate Professor of Marketing at NYU Stern Adam Alter offers some insight.
“Companies withhold information for many different reasons,” he said. “Sometimes they’re concerned that the information is too complex for the public to perceive its benefits; sometimes they’re simply focusing on other features of the product … and sometimes companies deliberately underplay an idea to create buzz.”
Certainly, it seems that Apple’s silence on the issue is their largest statement. Though the Apple SIM may not be such an important player in the industry right now, the potential it has to disrupt the market is immense.