Please ensure Javascript is enabled for purposes of website accessibility

1 Important Update to Apple Inc's iPad Pro Few Noticed

By Andrew Tonner - Apr 2, 2016 at 7:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Are embedded Apple SIM cards on iPads the start of something bigger?

Image source: Apple.

This past month, Apple's (AAPL 2.32%) new iPhone SE and updated 9.7-inch iPad Pro were the toast of the tech world, even as they also served as possible harbingers of slowing creativity at the tech giant.

Without question, the newly minted iPhone SE has garnered the bulk of the media coverage in the wake of Apple's event. However, Apple's revamped iPads also contain one subtle, yet interesting adaptation that could signal a coming technological shift for Apple products, one whose ripple effects could extend far beyond Cupertino.

SIM city
SIM cards don't necessarily make for front-page news stories. However, these tiny chip cards serve as the critical bridge between all cellular devices and the carriers that support them. As such, they act as the main point of connection between tech and telecom; between consumers and carriers. And though few media outlets have covered it, the freshly minted, cellular-enabled iPad Pros contain a new Apple-branded embedded SIM card.

For context, Apple included an Apple-produced SIM card with the Wi-Fi and cellular editions of the iPad Air 2 last year. However, Apple allowed the SIM card in the iPad Air 2 to be removed, which allowed some carriers, like Verizon Communications (VZ -0.49%), to force consumers to use its own locked SIM cards in order to use their iPads on the company's cellular network.

Unlike its predecessor, Apple's new iPad Pros feature a fully embedded version of its Apple SIM card in addition to the traditional slot where consumers can insert any telecom providers' SIM card. This, in effect, allows consumers to be able to operate cell-enabled iPads as fully unlocked devices, though some carriers are working to counter this move. While U.S. carriers Sprint and T-Mobile support the move, AT&T includes its own locked SIM card for cell-enabled iPads purchased in its retail stores. Similarly, Verizon requires a separate SIM card to access its network. Verizon also disables the embedded Apple SIM card.

So, why are some of the most powerful wireless carriers fighting Apple's move here so vigorously?

Image source: Apple.

Sign of things to come?
The core question is does Apple's move reflect the beginning of a wider strategy to unlock all of its devices?

In the U.S. particularly, wireless carriers play a relatively prominent role in determining which networks consumers can and cannot use. According to researcher CIRP, 57% of all U.S. mobile devices were purchased through a carrier's store as of the end of 2014. Though admittedly somewhat dated, this certainly speaks to the outsized influence, and means through which, wireless carriers exert control over the market. Controlling a major piece of the distribution channel enables carriers, particularly AT&T and Verizon, to sell iPhones and iPads that come with their own locked SIM cards.

As noted above, Verizon and AT&T are still doing so with the new iPad Pro. However, the general trend in the industry has gravitated increasingly toward unlocked smartphones and cell-enabled tablets. For example, Alphabet's Project Fi cellular service allows consumers to dynamically switch between Sprint's network, T-Mobile's network, and Wi-Fi all in real time. What's more, Apple's new iPhone installment plan similarly sells unlocked iPhones, though devices purchased through carriers typically come with their own locked SIM cards.

The direction the industry has taken appears clear, and Apple's move with the iPad Pro might signal an increased commitment to further integrate unlocked devices as part of its overall strategy, which would certainly prove to be a win for consumers.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
$143.78 (2.32%) $3.26
Verizon Communications Inc. Stock Quote
Verizon Communications Inc.
$50.99 (-0.49%) $0.25

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.