From the beginning, iPhones had an outsized impact on the cellular infrastructure industry, literally pushing AT&T (NYSE: T) into increasing the speed of its 4G deployment. Now, through Apple’s (NASDAQ: AAPL) release of an embedded SIM (eSIM)-only iPhone, the handset maker may push carriers into supporting eSIM phones. Additionally, Apple now stands to possibly become a mobile virtual network operator, according to Kester Mann, Director, Consumer and Connectivity at CCS Insight.
An embedded SIM features a small chip inside the handset that replaces the need for a physical SIM card and tray, and Apple has supported it, alongside the physical SIM card, since 2018. But with the iPhone 14 in 2022, Apple introduced the first eSIM-only handset.
If Apple were to focus on eSIM-only iPhones, all carriers could be pushed into supporting eSIMs, in order to accommodate the latest iPhones. “As Apple is the leader in this market, it’ll affect tens of millions of potential customers,” Mann wrote. “Such is the strength of the iPhone, it feels inconceivable that any carrier can be successful without working alongside Apple. Providers that are not ready, prepared or able to support e-SIM will be heavily disadvantaged.”
“The most drastic scenario would be if eSIM encourages manufacturers to become mobile virtual network operators themselves,” Mann wrote. “Customers would then be able to buy a device and service plan from the same company, leaving traditional operators cut off from direct interaction with users.”
Mann doesn’t believe that Apple will jump into operating a network in the near term. However, eSIMs are here to stay, because they reduce the need to manufacture, package and distribute millions of SIM cards annually, cutting costs and reducing the impact on the environment, according to Mann. “It can also help prevent fraud: as the SIM card is embedded in the hardware, it’s no longer possible to separate a subscriber’s identity from their device,” he wrote.
By J. Sharpe Smith, Inside Towers Technology Editor
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