The company has been working with Gemalto for three months on the project but major US and European operators have blocked the move, it said, adding that some even threatened to stop selling the iPad in their stores.
According to Les Echos, Apple does not want to depend on a single Sim card supplier to set the parameters and remotely administer the Sim cards.
Earlier, Apple was working with Gemalto on an iPhone with an embedded Sim card. The network information would be supplied wirelessly and saved in the handset’s memory.
According to the reports, this means a major strategy shift for Apple, opening the way for direct sales via iTunes: users first buy an iPhone and then choose a network. The current type of Sim card, which can be removed from the handset and changed, is central to the relationship between the operator and the customers, and as a result operators are not willing to let this go easily.
The term Sim refers to two things: the Subscriber Identity Module (Sim) that holds the customer and network’s unique details, and the physical case for this, the Sim card. The card is central to the operator’s relationship with the end-user; a Sim card from operator A does not work on the network of operator B.
Gemalto has developed a product for Apple that saves the information on a secure part of the phone’s memory, GigaOM reported citing sources at European operators. This type of System-on-a-Chip (SoC) includes a small operating system and memory for encrypted information, such as the user identity. There is also room for other secured applications, such as for mobile payments (Apple holds a number of patents for NFC). Gemalto will reportedly also supply a platform to manage subscriber details and support over-the-air updates. Several European operators have reportedly already spoken with Apple about the plans, but no one would confirm the talks, and Apple and Gemalto refused to comment.
The Financial Times writes that various European operators are concerned about the possible loss of control in their relationship with the subscribers. They are considering taking action against Apple, such as refusing to subsidy its handsets. One manager told the paper that Apple is risking 'war'. Vodafone, France Telecom and Telefonica were named by the paper, but none of them would comment.
Apple’s plans have technical advantages. With the identity saved in the phone, the Sim and its card are no longer needed, allowing for a flatter and simpler handset to produce.
The physical distribution and management of Sims is no longer needed either, saving costs. Operators and other brands will not profit directly from this, as the Sim card and its related infrastructure will likely continue for some years for other customers and handset brands.
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