Apple Planning Custom iPhone SIM Card?

Apple is reportedly partnering with SIM card manufacturer Gemalto to come up with its own reprogrammable SIM cards that could ship embedded in iPhones. GigaOm has heard from several European wireless carriers that the project is underway, and they're not thrilled about the prospect. An embedded SIM in the iPhone would make it possible for Apple to allow iPhone buyers to decide which carrier they want at the point of purchase.

iPhone activation could all be handled with a simple app download from the Apple App Store, cutting out the carrier's involvement in the process. Gemalto would provide support for the iPhone to find a phone number and start service on a carrier's network, and the appropriate data would activate the device after it's written to flash memory in the SIM chip.

This makes more sense in the highly competitive European mobile market, where device technology is standard (GSM) and the iPhone already has ended many exclusive contracts with carriers in multiple countries. iPhone users would easily be able to switch carriers without even switching out or customizing their SIM cards. Apple would essentially be taking more control over selling iPhone hardware, leaving wireless carriers out of the game entirely.

In the US, the issue is a different animal with the ongoing exclusive AT&T Mobility contract. Even if the iPhone were to make it to other carriers such as Verizon Wireless, the technology on each network is different at the current time. LTE won't be widespread and common between both major US carriers until at least 2012. For the time being, multiple carriers in the US would require multiple cellular chips to facilitate each network.

The iPhone will still need permission to operate on carrier networks, so it remains to be seen which companies would agree to such an arrangement. Of course, carriers still stand to make a lot of money from data charges and caller subscriptions. Representatives from French carrier Orange reportedly visited Apple in California to try and dissuade the company from its SIM card plans. Once again, Apple is on the brink of changing an entire industry.