Is Apple developing a carrier-hopping SIM to liberate the iPhone?

By Molly McHugh October 28, 2010

Speculation that Apple is in talks to drop carrier distribution and sell the iPhone directly to consumers is circulating the Web this morning. GigaOm first reported the rumor, claiming that European sources know Apple to be in the process of creating a SIM card that can hop from carrier to carrier, potentially enabling users to purchase iPhones from the Apple Store (including the online store) and use the App Store to choose from among available GSM carriers. Apple is allegedly partnering with SIM card manufacturer Gemalto to develop the technology.

So what exactly would this mean for (at the moment, European) consumers? First, it could save new iPhone users a trip or call to their carriers to get the specific SIM card. Second, users could roam more freely, potentially hopping between multiple networks on a whim. The European cell phone carrier market is much more competitive, and multiple providers carry the iPhone, so this could be a blessing for consumers, and a death sentence for retailers.

The possibility of this succeeding in the US is less likely. For the time being, the iPhone is exclusive with AT&T, and even on that network, buying an iPhone without a contract triples the price of the phone. But if Apple can make this succeed overseas, it’s covering some new territory that other cell phone developers might start considering.

If selling phones independent of carriers sounds familiar, it’s because Google planned to implement a similar plan with its short-lived Nexus One phone. Lukewarm reviews ultimately killed the phone, but consumer confusion over support issues (“My phone doesn’t work. Do I contact Google or T-Mobile?”) helped highlight the problems associated with peddling phones independently from carriers.

Ultimately, it wouldn’t be a bad thing for consumers, creating competition for your business. On the other hand, retailers – primarily international ones – should be nervous. Either way, don’t expect Apple to execute this Stateside anytime soon.

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