Monday, April 23, 2012

Apple's SIM Card War

Not much has changed at Apple (Nasdaq: AAPL) since Steve Jobs lost his battle with cancer. The company is at again, trying to dominate its competitors. This time the battle is for the tiny sim cards which go into every mobile phone.

Apple is again butting heads with the likes of Nokia ADR (NYSE: NOK), Research in Motion (Nasdaq: RIMM) and Motorola Mobility Holdings (NYSE: MMI), which is being acquired by Google (Nasdaq: GOOG) to have its standard adopted for the next generation of slimmer phones. The goal is to have its “nano-sim” lead the technology revolution in the miniaturization of smartphones.

“Micro-sims” (not an Apple product) are currently the standard in phones such as the iPhone. The new nano-sims are thinner and about a third smaller than the micro-sim. Micro-sims must be driving Apple nuts since the company is notorious for wanting to control the entire experience with regard to all of its products. The nano-sims would be made by Dutch company Gemalto in close cooperation with Apple.

This latest battle is taking place in Europe, at the European Telecommunications Standards Institute. Apple has reportedly already gained the advantage over the sim standard offered by Nokia and others because it has offered to the European telecom carriers the design for its nano-sim for free. Apple certainly knows how to win friends.

The competition (Nokia and Motorola) have tried to point out to the telecom companies that Apple's nano-Sim could require a “drawer” to protect it. All phones may then need to be re-engineered with that “drawer” in mind, which would be burdensome to the other smartphone makers not called Apple. Nokia and the others have said that its proposed new sim card has “significant technical advantages” over Apple's nano-sim.

Why does Apple even care about the Sim card? In the past, the company even considered dropping Sims but stayed with them due to opposition from the phone carriers.

Apple is always concerned about the design and usability of its products. A smaller Sim card in the next generation of iPhones and iPads would certainly leave room for other components, such as perhaps larger batteries for the power-hungry devices. But Apple probably has something else more in mind than just adding components to the insides of their devices.

If Apple is successful in its efforts, Apple sees a world someday where iPad and iPhone users would be able to purchase their devices directly from Apple and the phone companies Then consumers could choose the carrier they want and activate the service. Apple is simply using the free sim cards to try to gain more control over an area they currently do not control – the phone carriers. Yes, little has changed at Apple.

This article was originally written for the Motley Fool Blog Network. Please see my daily articles for the Motley Fool at

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