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Reading: Will Apple switch the iPhone to eSIM-only everywhere by ’24?
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WhatsNew2Day > Tech > Will Apple switch the iPhone to eSIM-only everywhere by ’24?
Tech

Will Apple switch the iPhone to eSIM-only everywhere by ’24?

Last updated: 2023/03/16 at 11:35 AM
Jacky 7 days ago
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Apple, eSIM, iOS, iPhone, network
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With the arrival of the iPhone 14, Apple has only sold smartphones with eSIM support in the US. But that may be about to change. At least one analyst thinks Apple plans to expand eSIM use to Europe and some Asian markets by next year, when the SIM cards are removed from its devices.

Contents
eSIM for the rest of us?Are there any other benefits?How can Apple make money selling contracts?Can Apple become its own mobile carrier?But what about competition?Either way, eSIMs are the future

eSIM for the rest of us?

We’ve been anticipating the move since Apple started using eSIM in the iPhone in 2018, though consumers have complained about the complexity of the setup in the US. In part, these challenges reflect inconsistent approaches to technology among mobile carriers, but there may be a reason for that, especially as Apple and Google begin to try to monetize carrier choice on new devices.

Speak against Read light, Omia analyst Dario Talmesio shared his speculation and suggested how wider adoption of eSIM could affect mobile carriers and consumers:

  • For device manufacturers, in this case Apple, removing the SIM card makes it possible to use the freed up space for other components and services.
  • Mobile carriers can compete for on-device customers, not just online and on the high street.
  • Competition between carriers is intensifying, in part because services can target customers directly.
  • User churn may increase as it becomes easier to switch providers.
  • Prices may drop.
  • Apple (and Google/Android) could act as gatekeepers on mobile contracts and charges.
  • eSIMs could give Apple the chance to become an MVNO (Mobile Virtual Network Operator), competing with existing carriers.
  • And eSIMs will become mandatory as carriers look to support emerging markets like wearables, vehicles and more. (Apple Watch has its own eSIM.)

Are there any other benefits?

Beyond the convenience of using one device for multiple lines, the obvious benefits of eSIM on an international scale for consumers are that they can look forward to competitive signup deals while carriers fight churn. That could translate into lower prices, but could also lead to additional incentives, such as free access to Apple Music, accessories, or robust service quality levels.

Talmesio speculates that wider adoption of eSIM could also lead to the evolution of automated switching services, where consumers are automatically signed up for new deals based on factors they care about: price, coverage, data limit, etc.

Despite possibly increased competition, there are also advantages for carriers. As they evolve from business models based on network provision to becoming complex network-based service and integration providersadditional services such as private, secure 5G business-to-business communications can become easily accessible.

Another benefit for business users: Combined with adjustments to Apple’s existing MDM ecosystem, it could make it possible to remotely equip managed devices with second lines for businesses during installation.

After all, if there’s a carrier store supported by eSIMs on iOS, that presumably means carriers can be provisioned via API. For business users and business services, an on-device network supply store can help them reach the high-quality business customers that most high-end (and expensive) network service providers crave.

How can Apple make money selling contracts?

Apple could combine competing mobile services into its own store within the control panel. This would make it easy for customers to transfer their existing number from their old device to a new device and provide the opportunity to shop for the best carrier deal. You’ll see something like this already during the setup process for eSIM-enabled iPads.

The process may include a selection screen where users can define what they want from their network from a menu of available services. Sign-up can be done on the device and payment/subscription can be made via Apple Pay (and soon other third-party payment services).

Later on, if a user wanted something different from their service, a new provider would be a few clicks away – subject to carrier lock and slow number porting, of course.

A second option might be to leave customers with their existing carrier but bid higher to offer second lines during the iPhone setup process. iPhones can currently support multiple eSIMs, with only two active at any given time, but it’s uncertain to what extent the double SIM capacity is used. By encouraging usage, the eSIM gives customers the chance to switch networks at will. You might have an all-in-one data bundle with one service and a free image sharing service on the second and an automation to make the switching process frictionless.

In both cases, Apple charges a fee.

Now, anyone watching Apple’s business knows that the size of the cut needed is being heavily revised. I think eventually it will be 15% – regulators will not deny Apple’s right to make money, although they will adjust the approach. At a certain point an acceptable amount is agreed upon.

Can Apple become its own mobile carrier?

With eSIM and a network access store, Apple could establish itself as an MVNO in some key areas. If so, the most likely route is through an agreement with existing carriers to provide bandwidth and coverage and supplement it with proprietary services.

It could complement traditional carrier services with its own unique satellite-based services as its agreement with GlobalStar expands. It’s worth paying particular attention to those agreements, especially since Apple makes them inevitable steps towards 6G.

Offering additional services in addition to agreed partnerships is perhaps the least risky way Apple can approach becoming an MVNO. The challenge is that Apple must ensure that competitive services are not overshadowed by the size of the market, and if it makes its service available as an option during installation, it will have to lightly circumvent competition laws.

Apple is heavily scrutinized by regulators these days, and even a company dancing on the edge of legality for profit can’t expect too much leeway if it does badly in the highly competitive, but strategically vital, carrier business. I actually think there is too much complexity inherent in such an attempt. It will most likely refine a more complex way of extending existing services to take some of the network supply.

But what about competition?

The problem is competition. By acting as a gatekeeper, Apple could be put in a position where the way it offers the various networks is perceived as market manipulation. This would quickly lead to scrutiny by regulators; carriers will not remain silent if their business is affected.

In the UK, Ofcom in December have a look at this. It noted that eSIMs could allow Apple and Google to embed carrier selection into their apps and noted many of the positive potential benefits of doing so.

It also warned:

“Given the strong loyalty to iOS and Android, it’s also possible that Apple and Google don’t face enough competitive pressure to charge mobile carriers high commissions for exposure on their selection screen/app. If so, these commission costs are likely to be passed on, at least in part, to consumers in the form of higher prices.”

This can also reduce or affect choice based on positions on setup screens. Providers unwilling to pay to be included may be excluded or placed below the fold.

Either way, eSIMs are the future

Ofcom admits eSIM is coming. “We expect most consumers to adopt eSIMs over physical SIMs within the next five to 10 years,” it wrote.

The question is whether Apple will begin the move to mandate eSIM support internationally as it installs its own 5G modems in iPhones later this year.

Given that the move to proprietary modems may not be entirely smooth sailing – and the massive internal effort now taking place around Apple Reality – the company may think it makes more sense to delay the international rollout of mandatory eSIMs a little longer.

At the same time, the 5G modem it is developing may already be built with the best eSIM integration, in which case the success of that project will be felt most strongly in the US, where eSIM is already mandatory.

Please follow me on Mastodonor join the AppleHolic’s bar & grill And Apple Discussions groups on MeWe.

Copyright © 2023 IDG Communications, Inc.

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TAGGED: Apple, eSIMonly, iPhone, Switch
Jacky March 16, 2023
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