Just as “film at 11” is an anachronism in every sense (there is no film these days, most news is obtained at times other than 11pm), “Apple is evil” falls squarely into the same category. Yet, click-bait über alles, and we still have the mindset that everything Apple does has to either be benevolent graciousness (if you’re a fanboy) or the EndOfLifeAsWeKnowIt™ (if you’re on that other side). Folks, just like Apple itself has moved on from these discussions (more on that eventually in an in-depth analysis of the kefluffle that the iPad is creating), it’s time to figure out some new game to write about.
Wired’s Epicenter column on 5-Feb is a prime example of someone who either doesn’t get it or chooses to feign ignorance to generate hits.
Now, to be fair, could it be that Apple’s only motivation for moving to a microSIM card is to further cozy up to AT&T and force more people to lighten their wallets for the use of an overburdened data network that focuses on locality over broad geography (an odd choice for a mobile technology but that’s a different rant)? Could Apple be doing this just to “mess with you” as the title of the article states? Possibly. Occam might have issues with that, however. That’s not to say that Apple and AT&T are turning away the incremental revenue this change might bring, but it’s highly unlikely it is a primary motivator.
Also, by the time I sat down to write this, some commenters on the article have touched on some of the same themes. lmasanti, mulderc, and Kane (as of about 10a PT 6-Feb) have it at least partly right, so props there too.
What is Apple up to?
Apple is always looking forward in its products. Regardless of whether you consider many of the “omissions” in the iPad a result of intent or failure to comprehend the market, iPad v2 is already in the works and awaiting feedback on how iPad v1 is actually used. When the original iPhone was released in 2007, do you think Apple didn’t already have plans for the 3G? Combine the software features with the hardware features and you come up with some traditionally reasonable product development pipelines. When you step back and look across the product lines, it’s not hard to identify areas of overlap. Multi-touch, UX, battery technology, applications, and more, all give hints from one product to another.
That’s all well and good, but what about the microSIM?
Why would Apple move to microSIM? And why would they do it on the iPad first, since it obviously will distress those in the technology community who need some cause to latch onto to bash Apple?
Per PC Magazine 3FF SIMs (the formal name for microSIM) was developed by the European Telecommunications Standards Institute. Global adoption of technology (when it’s the correct technology) means that Apple will have an easier time selling their product and integrating with where the communications industry is going.
It may seem counterintuitive for a large-format device to use the smaller SIM, but there’s really no reason not to do so, assuming there are other reasons as well. Consider that when Apple uses parts that are not commonly available, the cost per part goes up. Even when Apple is able to make a complete volume market itself for these new technologies, the scale economy still has to be ramped up. Anyone who pays attention to Apple’s fundamental financial performance knows that despite the on-going protestations of margin erosion, Apple is famously successful at keeping these numbers higher than expected. If Apple is going to choose between two components of equal functionality at different price points, using the higher-priced component is not going to be “just to mess with you”. That size change may not be obviously beneficial to the first generation iPad, but be assured that the iPad itself did benefit, as will other Apple devices.
Related to the size point above, Apple does not design products for “limited availability” or artificial scarcity. Since Jobs’ return, the company has managed its inventory, manufacturing capacity, and channel volumes famously well. What does this have to do with using the iPad as a launch point for microSIM? The format is just now being adopted by card manufacturers and device makers. That takes time to ramp up capacity and bring devices to market that utilize the technology. Depending on where you stand with the feature set and price point Apple has set for the initial iPad, it’s fairly easy to imagine that the sales numbers of rev A will be lower than the sales numbers of rev B (witness the iPhone sales acceleration curve). That gives Apple and its suppliers an opportunity to adapt to the newly created market before completely inundating it with demand, leading to retail product shortages and unhappy prospective customers.
Add these up and there is a compelling argument that whatever short-term financial benefit Apple and AT&T might receive from the switch now (and for Apple, it’s not clear that there is a financial benefit in the short-term), this is a long-term roadmap decision.
Of tea leaves and chicken bones
Since this move really seems to be about establishing the next generation of product componentry, what might be predicted from these changes?
First, let’s list the changes themselves that might be relevant:
- The iPad is unlocked (even in the US)
- The iPad has a contract-free data plan available (from AT&T no less)
- The iPad uses a much smaller SIM card to enable this mobile connectivity
Looking at this list, multiple topics jump out.
Apple and AT&T have “had each others’ backs” during this data access debacle that is the meltdown of AT&T’s 3G network under the load introduced primarily by the iPhone (and its rogue users, if you listen to the AT&T gum-flapping at the trough of issues). Apple is supporting AT&T even when AT&T is not supporting Apple (tethering, anyone?). Why? And when is it expected to change? Yes, it will change at some point if AT&T doesn’t succeed in its network revamp. The first steps, the shot across the bow, is the iPad. Much like on the hardware adoption side, Apple might want to use the microSIM first in the iPad, Apple can send a message to AT&T with the iPad in a lower volume (both units and decibels) than it would be able to with the iPhone. It’s not in either companies’ interest to simply dump the relationship, no matter how vociferous the general public is. There are true technological advantages to AT&T’s current technology (all bets are off when it comes to LTE). Before the obvious “but Apple has multiple carriers elsewhere in the world,” this says more about the state of wireless carrier technology in the US than anything else. Even T-Mobile, which uses the same 3G technology doesn’t use the same 3G. It’s a mess, but even with Apple’s billions of dollars in cash, it cannot single-handedly rebuild the US wireless infrastructure. All it can do is try to save that industry from itself.
All that being said, what’s the point of unlocked devices then? Connectivity without the negotiation. Imagine how much time Apple Legal spends trying to arrange the agreements with companies like AT&T, Orange, etc. Now that the iPhone ecosystem is established (and has been for a while), Apple can go back to making the drool-worthy devices (I know, a matter of some opinion on the iPad) and ultimately let the carriers fight over how they will implement the data plans. Will this ever lead to subsidized devices and data contracts? That is hard to tell, but probably not, as this sales/data model may very well be an acknowledgement of not only the present mobile communications model in Europe but the coming changes in US telecommunications regulations as well. Is there anyone who believes that an unlocked iPad (regardless of the technical realities of which carriers can actually support it at the moment) isn’t a bone tossed to the US FCC and its recent investigations into opening up America’s wireless communications?
Go where you want, when you want. Assuming technical compatibility, of course. The freedom intoned by the lack of a contract is a false benefit in the US right now, but that’s not really Apple’s fault. It’s not realistic to create one device, one hardware set, that works across the whole spectrum of US (and worldwide) mobile carriers. Ask Motorola, Nokia, SonyEricsson, or even Research in Motion what their inventory management and logistics are like with the different devices. A hint: when was the last time you saw a “buy one get one free” offer on an iPhone?
Still, should you want to stop paying for a while and utilize Wi-Fi only, there you go. If you never intend to use your iPad outside the range of hotspots, you don’t even need to pay for it. Yes, there are legitimate reasons for making this cellular-free device: think education, to start with. The larger argument for this configuration would be for another article.
Contract free softens the reaction to AT&T being the provider in the US. While there is no choice in carriers, there is at least a choice in how much money to shell out for the capability.
Contract free sets the stage for the areas that do already have real competition in wireless carriage, as well as establishing new ground rules between Apple and the industry, should the industry actually embrace competition.
For those who are looking for extra credit, think even further ahead. Taking into consideration that many things Apple does in one device make their way into other devices in one form or another, can you think of any other devices that might be able to make use of a contract-free, unlimited mobile data connection?
The smaller SIM card
Let’s face it; the smaller SIM card, other than being a nicety, doesn’t add much technical benefit to the rev A iPad. As noted above, though, it’s not supposed to. This is the way to lay the foundation for the higher volume use in a next iPhone; whether it would be “this year’s” iPhone (which of course has not been announced, reported on, etc. but is widely expected) or one after that. Regardless, the logistics and supply chain ramp-up has begun. Expect more microSIM usage, and relatively soon, both from Apple and from a wide variety of non-Apple devices.
A circle has no end
Back to the beginning we go. Why microSIM? Apple is setting the pieces for a new chess game. The use of microSIM heralds changes afoot, both technical and practical. Anyone who is focusing on the short-term disruptions or assigning motivations as narrow as “Apple & AT&T are all about squeezing every last penny from the user base over every last thing” are truly missing the point. Apple is moving forward; catch up or be left behind.