Tuesday, November 10, 2015

SIM: The ‘knockout’ feature Apple didn’t mention

A pre-installed data-only SIM card has been inserted into the $499 iPad Air 2, and allows users to change carriers at the tap of a finger. It's available in the U.S. on AT&T, Sprint and T Mobile, and in the U.K. on EE. Consumers can buy short-term data plans and can switch between the carriers to find the best deal.
Consumers would be able to change the carrier on the iPad Air 2 if the network cut out, but one analyst said the "knockout" aspect was the potential to kill data roaming charges. And it is this ability to change carriers that could prove to be a game changer for other Apple products such as the iPhone.
Apple said on its website that users "may also be able to choose a data plan from a local carrier for the duration of your trip."
"The final knockout is the fact that you can switch networks when roaming in the U.K. and U.S. right now, rather than paying expensive charges," Ben Wood, chief of research at CCS Insight, told CNBC by phone.
"If Apple can secure this with other network operators across the world it becomes massively attractive."
Apple has been struggling with declining iPad sales, with units sold falling 9 percent in the third quarter of 2014 compared with the same time last year. This compares with 11 percent year-over-year growth in tablet shipments worldwide in the second quarter of this year, according to IDC.
Ian Fogg, head of mobile at IHS, said the Apple SIM move is an attempt to "raise the appeal of the iPad."
Apple iPad Air 2see Crowdfunding sites
Justin Solomon | CNBC
Apple iPad Air 2
iPads have always had data SIM capabilities, but it is normally bought through a contract with carriers which tie users into paying a monthly bill for a certain amount of time. The Apple SIM, according to Fogg, could "test the business model of operators" if it introduces a similar type of SIM on to iPhones but with data, calls and texts.
"Were Apple to offer this on the iPhone, it could change completely the relationship between mobile operators and consumers. Suddenly consumers may find it easy to switch operators and Apple will find it very easy to sell iPhones through Apple stores," Fogg told CNBC by phone.
The Cupertino, California-based technology giant, which recently unveiled the iPhone 6 and the larger-screen iPhone 6 Plus, has been accused of lacking innovation. The unveiling of the Apple Pay payments system and wearable Apple Watch looked to stem the criticism.
While the latest release has been praised by some analysts, not all agree that Apple will be able to transfer the SIM model over to the iPhone because of tough opposition from networks.
James Gautrey, global technology and telecoms sector specialist at Schroders, said monthly contracts offered by carriers allow consumers to afford highly priced devices like the iPhone 6, and Apple wouldn't want to "risk annoying" them by introducing the SIM into their smartphones.
"I don't think Apple is going to be quite brave enough to offer this as a SIM-only plan on a phone because Apple relies on carriers to sell their iPhones," Gautrey told CNBC by phone.
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