​All about the SIM - Why Apple’s biggest announcement was also the quietest…

One of the quieter things to come out of last week’s Apple presentations for the new iPhone SE and Apple 9.7-inch iPad Pro was that the new iPad would include an embedded Apple SIM.

“This makes the new iPad the first non-M2M and non-wearable CE device to use a true embedded SIM,” observes Ken Hyers, Research Analyst, Strategy Analytics.

As Hyers explains, the Apple SIM has been included in previous iPad models, but this new iteration is different.

“The earlier Apple SIM was a physical SIM card, installed at the factory, which allowed the user to choose from multiple operators’ data plans and provision cellular service directly from their iPad,” Hyers adds.

“The new embedded Apple SIM does the same thing.

“The difference? The new embedded SIM is hardwired directly into the device and is no longer removable (although the 9.7-inch iPad Pro is a dual SIM device, meaning a second physical SIM can be installed and removed).”

In itself the new iPad’s eSIM isn’t such a big deal, Hyers counters.

However, it likely presages an eSIM in an upcoming iPhone, something that operators have been bracing for, for some time.

“Short of offering its own MVNO, from a carrier perspective an eSIM iPhone would be the most destabilising change Apple could make to their existing iPhone business model,” Hyers adds.

“With an eSIM equipped iPhone a customer need never directly interact with an operator again, instead provisioning service and switching from carrier to carrier at the customer’s whim.”

Adding an eSIM to the iPhone would be a direct shot across the bow of carriers and according to Hyers, with eSIM, Apple’s grip on the customer will become even tighter.

Bigger iPhone plans?

Echoing Hyers’ comments, fellow Strategy Analytics Research Analyst Colin Gibbs says the cellular-enabled version of the new 9.7-inch iPad Pro will include an embedded Apple SIM, just as other recent models have.

“Rather than a physical SIM card, though, the new SIM won't be removable,” Gibbs adds. And that could signal bigger plans for Apple's iPhone.”

Apple has packaged a removable SIM in its tablets since 2014, enabling users to switch between operators and to access cellular networks in foreign markets.

Just a few weeks after the Apple SIM was introduced two years ago however, Apple's Greg Joswiak said the company hadn't discussed using the SIM in the iPhone because most phones are sold through carrier channels.

"I don't think you're going to go to the Verizon store and say, 'Can you hook me up with AT&T?," he said.

But times have changed for Apple's smartphone business. Sales of the iPhone are flattening, and the company is increasingly emphasising revenues from its mobile services as well as its hardware.

“Apple still doesn't want to infuriate its carrier partners, but the benefits of offering an Apple SIM with its iPhone may outweigh the risks,” Gibbs adds.