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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31 Comments

1. Rigmaster

Posts: 234; Member since: Jan 22, 2018

More control in the hands of the user - perfect!

2. cncrim

Posts: 1590; 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.

7. vandroid

Posts: 405; Member since: Sep 04, 2012

Sounds too good to be true coming from Apple

32. sissy246

Posts: 7129; 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: 7520; Member since: Feb 17, 2016

How Sway?

35. tedkord

Posts: 17463; 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: 1822; 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: 905; 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: 2487; 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: 1822; 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.

42. Zylam

Posts: 1822; 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.

9. Xxtoxicskittlexx

Posts: 193; Member since: Jun 11, 2018

Anyone know how this works if let's say I decide to sell the phone to someone ? Would this require a new esim code ?

11. RebelwithoutaClue unregistered

I don't think so. They will un-register the eSim with the carrier and the new one has to register it again. Even old-fashioned sim cards can be migrated between carriers if both would play ball.

10. NarutoKage14

Posts: 1346; Member since: Aug 31, 2016

I think this will see far more widespread use outside of the US where switching sim cards is already far more commonplace.

13. warrenellis93

Posts: 557; Member since: Jul 21, 2011

all phones should be echip by now

14. Rigmaster

Posts: 234; Member since: Jan 22, 2018

Unlocked iPhone 6/6+ offered the ability to switch via nano-SIM cards and . You could switch SIM by carrier regardless of GSM or CDMA and it works. For the most part, this feature wasn't heavily pushed at the point of sale unless you purchased your phone outright in an Apple store. Carriers don't want the public to prefer contract-free or to be easily able to jump from one to the other. When this happens, it just comes down to network coverage. Gone are the add-ons and crap-ware. Gone are the shady financing deals. Gone (well, greatly reduced) are the customer service debacles. Again, Apple will be the first to do full eSIM. Then, others will follow. Apple can because they don't need carriers to sell iPhones. Hardly any other actual Company-owned and specific walk-in places to by Samsungs or other models (and I don't mean third-parties like BestBuy or Amazon). There are some things fandom aside that Apple does well, and eSIM will likely be the next.

18. KingSam

Posts: 1505; Member since: Mar 13, 2016

I'm wondering if my local carriers will play nicely with this.

22. Valdomero

Posts: 704; Member since: Nov 13, 2012

Can someone tell me what happens or how do you do when you travel abroad? For example: You live in the US and you go to vacation to Germany, the first thing you do with a current phone is buying a sim card from the local carrier and switch sim cards in order to have data. How do that works with eSIM?

29. Rigmaster

Posts: 234; Member since: Jan 22, 2018

If you're US-based with US-based network provider, international SIM practices vary. I'm pretty sure it's easier with TMo & ATT as they both are GSM. I can't speak to VZW or Sprint any longer as I've not had a CMDA phone in years.

25. syed_itsa

Posts: 50; Member since: Feb 05, 2015

Come on USA cellular service providers. Even in Poor countries with 4-5 Cellular service provider . They don't lock their phones and still making money

33. gjkiii

Posts: 41; Member since: Oct 25, 2013

Does this mean that if you have a phone like this you can't switch from phone to phone on the fly like people do when they switch their sim cards daily depending on which phone they want to use?

38. domfonusr

Posts: 1094; Member since: Jan 17, 2014

You do realize that this can't hurt Apple. It will drive the carriers crazy, but they will adapt. But it will hurt the Android OEM's, because they will be pressured to support eSIM in order to please their customers (attempted parity with Apple), but the problem will be that this will end the practice of offering discounted or free phones on prepaid carriers, because now they will have to collect the full cost of the phone up front in order to cover their expense of offering a phone prepaid that has an eSIM. Cheap Android phones will become more expensive, and people will respond by choosing other more expensive handsets because the price gap will have been reduced, and that can only work in Apple's favor at this point.

45. tokuzumi

Posts: 1961; Member since: Aug 27, 2009

If you buy the phone through your carrier, you are locked into your contract. If you want to break that contract, be prepared to pay (a lot of carriers will pay your ETF if you switch to their network). Not really sure why they are worried about e-SIM. Will make it super easy for prepaid services. No need to wait a couple of days for the new SIM to arrive in the mail. Just pay, and provision right then.

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