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Secure Transactions News

Gemalto to support Apple to become MNO independent

Thursday 4 November 2010

According to this GigaOm sources from inside European mobile network operators, a special SIM card would be integrated into the iPhone itself; then customers would be able to choose their carrier at time of purchase at the Apple web site or retail store, or buy the phone and get their handset up and running through a download at the App Store as opposed to visiting a carrier store or calling the carrier.

The Gemalto SIM, according to GigaOm sources, is embedded in a chip that has an upgradeable flash component and a ROM area. The ROM area contains data provided by Gemalto with everything related to IT and network security, except for the carrier-related information. The flash component will receive the carrier related data via a local connection which could be the PC or a dedicated device, so it can be activated on the network. Gemalto will provide the back-end infrastructure that allows service and number provisioning on the carrier network.

With this model, instead of popping physical SIM cards in and out of an iPhone, the SIM can be reconfigured to work on a different carrier by uploading a small file with carrier-specific data to the module's flash memory. These files could be uploaded via a Dock connector or over the air via the App Store or directly from a carrier.

The rumor site also mentions several executives from various French carriers have visited Apple in Cupertino in recent weeks, probably to discuss the new SIM updating mechanism.

The system is said to be particularly useful for the European and Asian markets, where many carriers compete for customers and users frequently roam outside of their local coverage area. A simple phone call may be all that's required to update the internal SIM to work on a different carrier's network. The US market situation is different as carriers have developed their networks along different standards (GSM and CDMA), and on different bands, thus making churn more difficult for end users.

With Apple providing the SIM and activation, the customer contract could be with Apple, not the carrier, which would sideline the carriers, as well as create more options to customers—and revenue for Apple.

This technology evolution can also be seen as a new step in the smartphone operating system war: According to comScore, from July through August, Apple's iOS ran on 24.2% of smartphones, while Android ran on 19.6%. Apple shipped 8.4 million handsets worldwide during Q2/2010, down from 8.8 million in Q2/2009 ; at the same time, HTC saw shipments rise 63.1% sequentially to 4.9 million from 3.0 million in Q1/2010, boosting its market share to 8% from 5.3% (cf. Smart Insights Weekly #10-42).

As a reaction, European mobile network operators may boost their plans to create their own common platform for mobile devices. Discussions between France Telecom-Orange, Deutsche Telekom, Telefonica and Vodafone on a potential common operating system have already started (cf. SIW #10-40).