Report: 2018 Apple iPhone models will use eSIM chip; U.S. carriers are concerned

Report: 2018 Apple iPhone models will use eSIM chip; U.S. carriers are concerned
U.S. carriers like Verizon, AT&T, T-Mobile and Sprint are concerned that a recent report from Dow Jones is true. The word is that the 2018 Apple iPhone models will replace the tradition SIM card and SIM tray for an embedded eSIM chip. If this does occur, iPhone users will have a lot of flexibility when it comes to cellular connectivity. Unlike a SIM card, which is obtained from the user's wireless provider and must be inserted in a phone for it to connect to that provider's network, an eSIM is programmed OTA.

While a SIM card locks an iPhone user into one carrier, the eSIM can be changed at the whim of the handset's owner. If a carrier has poor coverage in a certain area, or another wireless operator has a lower price, a change can be made quickly and easily. Apple already allows this on the iPad with its Apple SIM card. The ability to change carriers at the spur of the moment is what has the four major U.S. carriers nervous.

How worried are the carriers? Worried enough for the DOJ to allege that Verizon and AT&T conspired with the G.S.M.A trade body. The trio reportedly agreed to come together in an attempt to develop technology that would allow phones with eSIM chips to be locked to one wireless network provider.

Craig-Hallum analyst Anthony Stoss told clients yesterday that based on his "checks," Apple might have agreed to a deal with ST Microelectronics for eSIM chips that would be placed on the iPhone's motherboard. The company, which already provides Apple with components for Face ID, and an eSIM chip for the series 3 Apple Watch, would take in $1 for each eSIM chip it sells to the tech giant for the iPhone. It should be noted that despite the use of the eSIM for the Apple Watch, consumers do have to have a carrier selected before purchasing the timepiece.

Apple, in selling these "unlocked" eSIM supporting iPhone models, is trying to loosen the grip that the carriers have with consumers, and tighten the grip it has with iPhone owners. Obviously, carriers would try to restrict users of these models from switching providers constantly. This could be done by demanding that the balance owed by subscribers on units financed through the carrier, be paid immediately once a customer switches to another carrier. That is what the carriers do now to keep you locked in for 24 months, so why should we expect anything different?

It could be up to Apple to offer longer term financing or other sweetheart deals for iPhone models that have an eSIM chip inside. The 2018 lineup is expected to be unveiled in September, so if this report is accurate, Apple has only a few weeks left to figure out a plan.

source: Barron's

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45 Comments

1. Rigmaster

Posts: 234; Member since: Jan 22, 2018

More control in the hands of the user - perfect!

2. cncrim

Posts: 1586; Member since: Aug 15, 2011

No, it more like more control in hand of Apple. We dont know how it will playnout yet because we haven’t see the implications of the eSim. I believe Apple eSim will take power away from carrier but will put direct power to Apple.

3. AxelFoley unregistered

That's good internationally. In the US, most users are locked-in by financing their device from carriers anyway. So this will benefit a small percentage of users. But, it should still worry carriers who have the poorest coverage.

5. RebelwithoutaClue unregistered

Not sure how it is in USA but even Sim only subscriptions are at least a year so switching is not that easy. But its a good thing phones are moving towards eSim. Less space occupied by the Sim mechanism and also no need for a slot on the side.

16. Leo_MC

Posts: 7203; Member since: Dec 02, 2011

A contract should be fare for both sides. A free device is not a reason to keep the user captive, that's why paying the price of the device (or returning it in some cases) means the user is free to close the contract before its term.

19. RebelwithoutaClue unregistered

Over here if you end the contract, you just pay all the subscription money that is left on your contract at once. There are some smaller carriers who offer monthly cancelable subscriptions but those are rare.

21. Leo_MC

Posts: 7203; Member since: Dec 02, 2011

That's the same thing: the user is captive to the contract (what's the difference between paying the contract and not using the service and paying the contract and using the service?), a practice that should be illegal. The carriers in our country used to have that rule (unwritten in laws), but they lost 99% of law suits; a few years ago the laws were amended, clearly stating that the user should be free of contract after returning the benefit gotten from the carrier (most of the times a discount for the acquisition of a mobile phone).

23. RebelwithoutaClue unregistered

Why should it be illegal? If I enter a contract that clearly states it's one year, I am bound by that contract. After that year, I can cancel it whenever I want (monthly notice I think). Of course, they should offer a monthly one for sim only contracts since there is no investment on the carriers part. But those are usually more costly per month.

27. Leo_MC

Posts: 7203; Member since: Dec 02, 2011

It's illegal to keep one part captive in a (adhesion continuous) contract.

28. RebelwithoutaClue unregistered

Not by default, many businesses use continuous adhesion contracts like insurances, mortgages, leases and so on. Only in certain cases are they considered illegal by law and can you cancel the contract immediately.

31. Leo_MC

Posts: 7203; Member since: Dec 02, 2011

In your country maybe, in a reasonable country a contract cannot keep one part bind. EU has a law called ”Unfair contract terms directive”, which stipulates what I have said.

36. RebelwithoutaClue unregistered

True which means you can't put unfair terms in a contract. So even if you sign a contract for a new mobile subscription, they can't put in that contract that you sacrifice your newly born baby (just to mention an extreme here). That will be considered an unfair contract term. But holding people to their one year contract that continues after the year without explicit termination, aren't illegal terms in many European countries (including my own, Netherlands).

39. Leo_MC

Posts: 7203; Member since: Dec 02, 2011

As long as Netherlands is in EU, it's illegal. A contract should have a get-out clause, which should not be excessive; paying the full price of a contract means just that.

40. RebelwithoutaClue unregistered

Guess all of our big carriers are illegal then and no one sues them, since it's common practice

43. Leo_MC

Posts: 7203; Member since: Dec 02, 2011

I have said it: the same thing happened in my country, but none of the carriers won the trial against they users, motivating that "this is the contract", because the Civil law prohibits one part to keep the other part bind to a contract.

7. vandroid

Posts: 405; Member since: Sep 04, 2012

Sounds too good to be true coming from Apple

32. sissy246

Posts: 7065; Member since: Mar 04, 2015

" trying to loosen the grip that the carriers have with consumers, and tighten the grip it has with iPhone owners" No, it will give apple more control over the owners.

34. kiko007

Posts: 7493; Member since: Feb 17, 2016

How Sway?

35. tedkord

Posts: 17302; Member since: Jun 17, 2009

Not necessarily. Every eSIM device I've owned has been locked, and can't be changed to another carrier.

4. Zylam

Posts: 1813; Member since: Oct 20, 2010

Carriers, the scum of the tech industry. Apple is the only company that stands up and fights off the carriers. Android OEM's bend over backwards and let the carriers molest their software into the ground. Cannot wait for all phones, regardless of OS to come with eSim's. Instant activation's, no need to wait for a sim to be shipped to you, no need to physically remove or replace anything. And best of all no carriers inserting their hands into your life!

8. Tipus

Posts: 847; Member since: Sep 30, 2016

"Apple is the only company that stands up and fights off the carriers" Apple especially "stood up" against the carriers, when iphone was AT&T exclusive :))

15. Dr.Phil

Posts: 2340; Member since: Feb 14, 2011

True but you do have to admit that when it comes to updates, Apple has the advantage when it comes to dealing with carriers. Android phones have to deal with the carriers that seem to take their time when it comes to sending them out. Not to mention the bloatware that comes preinstalled on Android devices. That’s why I always despised purchasing Android phones from carriers. Never again.

24. BuffaloSouce unregistered

You mean updates that rarely bring anything new. Using the latest version of iOS still feels the CDC same as using it in 2012....android 8 feels to feels to feels to same as 7 just a little more polished

41. Zylam

Posts: 1813; Member since: Oct 20, 2010

"Apple especially "stood up" against the carriers, when iphone was AT&T exclusive :))" Awwww how cute, the fandroid has nothing to counter the pathetic Android OEM's that are STILL bring molested by carriers and reducing the quality of Android, except by bringing up the iPhones past where it was only exclusive in the US and was sold normally worldwide. Also buddy it's 2018, Apple controls their own eco system and OS, why are Android OEM's still letting carriers touch their genitals? Wait that's right, because the Android eco system is of trash quality. If we are bringing up the past, why don't we talk about 2007 when the first iPhone came out, where was Android? Oh that's right Google was busy making a blackberry ripp off but had to delay and rework Android to look like iOS. And what about Samsung, oh yeah they were making garbage Windows Mobile, Symbian and Flash based OS garbage phones, until they saw the iPhone and had to copy everything.

12. RebelwithoutaClue unregistered

"Apple is the only company that stands up and fights off the carriers." Slight correction, Apple is the only company that CAN stand up to carriers. Android OEMs don't have that power. Carriers would hate to lose the iPhone and its customers. With Android, let's say HTC doesn't play ball, hey let's switch to Samsung or the dozens of other Android handsets. So it is a lot easier for Apple to push certain things.

17. Leo_MC

Posts: 7203; Member since: Dec 02, 2011

Apple used to be a small player in the beginning (I don't know if it sold 1 mil phones) and yet it managed to impose its will. Android/Google is just as big in US (bigger elsewhere); do you think any carrier is crazy enough to risk a withdrawal of 80% devices from its shelves?

37. RebelwithoutaClue unregistered

True but you have to admit, when the original iPhone came out, it was revolutionary and people wanted it. Apple already had a name because they were doing very well with the iPods. Not to mention the fact that Android is open source, so altering it would be something Google couldn't stop. And alas Android manufacturers showed too little backbone here. I am not undermining Apple here, I think it's great they fight of carriers like that. But they are in a slightly different position than others. I am glad carriers over here are less invasive than US ones.

42. Zylam

Posts: 1813; Member since: Oct 20, 2010

You are right, but it's Google fault for letting Android get so out of control with OEM's and Carriers. It's astonishing to think that almost 8 years later, Android still has eco system problems. When will they be fixed?

44. RebelwithoutaClue unregistered

Not sure when it will be fixed. Certain aspects are slowly getting there, like project Treble is making updates easier. And I do think the government (or something like the FTC) has to step in and protect consumers in this. Another issue is market share, Google/Android is too big to be able to take steps like Apple does, since it will upset bodies like the EU.

6. Rigmaster

Posts: 234; Member since: Jan 22, 2018

I don't buy my phones through carriers, and I want as much control as possible. Am I worried about Apple's influence - not really. All they can do it make a phone I'll buy because it has features, like this, that I want. When all the giants fear a moving customer, then it's probably in the customer's best interest.

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