At its product reveal event this week, Apple announced that the company will be including embedded subscriber identity modules (eSIMs) in the new generation of iPhones. The move is likely to rankle some feathers at the big wireless carriers, but consumers will see benefits in the long term.
First used by Google’s Project Fi carrier service in the Pixel 2 smartphone, eSIMs are functionally different from traditional SIM cards. Instead of removable cards, eSIMs are soldered directly to the phone’s motherboard. Customers then download carrier information, either through Apple’s native software or through a carrier application downloaded from the App Store. This process saves the customer time and money when they switch carriers.
Traditional subscriber identity modules (SIMs or SIM cards), which are housed externally, often must be swapped out when a customer changes carriers. Changing out SIM cards costs time and money. Carriers typically charge a fee to purchase a new SIM card, and customers have to visit a store or wait for mail delivery to acquire one.
In April, the New York Times reported that the Department of Justice was investigating Verizon, AT&T, and the Global System for Mobile Communications Association (GSMA) for anti-trust violations over eSIM technology. According to the Times, Apple filed the complaint about the GSMA’s efforts to develop an eSIM standard that would allow carriers to hardware-lock a device’s eSIM to a specific carrier, negating its carrier portability feature.
This fight between Apple and the telecoms bodes well for consumers. AT&T and Verizon understand that eSIMs remove a barrier to carrier switching. By making carrier switching as simple as logging into a Netflix account, cellphone companies might expand customer retention incentives. Wider adoption of eSIMs could also present regional cellular companies an easier way to expand their customer base without having to expand their physical location footprint, adding competition to the telecom market.
As Apple goes, so goes the rest of the industry. Now that Apple has fully embraced eSIM technology, expect Samsung, LG, and Motorola to follow suit in the next cycle of flagship releases. Regardless of phone preference, consumers can expect changing carriers to become just a bit easier in the near future.
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