The iPhone 4 uses a micro SIM, and Apple has always wanted to create an integrated SIM card so that consumers can buy the popular phone without having to sign up to operators’ long-term contracts. But now, the big plan to bypass operators have been scraped and Apple is forced to go back to drawing boards after operators warned that they would boycott subsidizing the cost of the ‘overpriced’ phone. The story here is that operators worldwide are obligated to pay Apple the full £375 (USD 600) cost of the phone, which are somehow ‘transferred’ to consumers for ‘free’ under conditions of signing up for a 24-month marriage contracts.

Apple has always wanted to build ‘a more direct relationship with customers’ and has been working on plans to create an integrated SIM card so that consumers could buy the phone without having to sign up to operators’ long-term contracts. Indirectly, that’s going to kill the operators’ business by quite a huge pie since the iPhone has been a huge hit worldwide.

“Apple has long been trying to build closer and closer relationships and cut out the operators. But this time they have been sent back to the drawing board with their tails between their legs,” said a senior source at a mobile operator.

Having faced a huge barrier in their iPhone’s side, Apple however is still pushing ahead with the new SIM card in its iPad devices. The source said Apple was expected to bring out integrated-SIM versions of the iPad in the run-up to Christmas or early in the New Year, as previously reported in The Sunday Telegraph. Apple has been able to press ahead with new SIM in the iPad because the popular touchscreen computer is not subsidised by mobile operators. That’s probably released alongside the new ‘facelift’ version iPad, which is expected to be released within few weeks. It will be similar to the current model, but the “lock” button the right-hand side will be changed to a “mute” button similar to the one on the iPhone.

SOURCE via Telegraph UK