A few thoughts on the IIT RTC conference

Last week I attended the Illinois Institute of Technologyconference on Realtime Communications. I enjoyed it immensely – not a huge event (maybe 150-200 or so people, spread across various tracks), but a really good mix of attendees and topics. As well as WebRTC and cloud communications, it covered more general aspects of IP voice, IoT networks and applications, a touch of 5G, and quite a lot on public safety / NG911. Quite a bit of technology, but also a decent focus on use-cases and business. And well-curated to avoid obvious corporate pitches, even by sponsors.

There were many of the “usual suspects” for WebRTC, VoIP & APIs there – among them Chad Hart, Tim Panton, Emil Ivov, Alan Quayle, Dan Burnett, Ivelin Ivanov, Andy Abramson, Vladimir Beloborodov, Robin Raymond and James Body. But there was also a good representation of service providers (eg Comcast), and major IT/enterprise comms vendors with WebRTC leanings, including IBM, Microsoft, Oracle, Intel, Avaya & Unify, plus assorted smaller developers (for a mini TadHack hackathon), academics and students from IIT, and a few industry veterans like Henning Schulzrinne (former FCC CTO) and Richard Shockey (SIP Forum). Google participated remotely (especially on the topic of ORTC), and GenBand was also there in force, with its Kandy bus outside for a day.

I did a general presentation on the WebRTC market status (there’s now more than 100m active users, various new use-cases, and 20+ service provider deployments – more details soon). I also moderated a panel on contextual communications (with Tim, Ivelin & Santhana from GenBand), and participated in one with Henning about the evolution of “identifiers” and especially the future role of the phone number. I picked up a lot of new insights into areas such as WebRTC+IoT (more soon), the state-of-the-art for mobile WebRTC implementation, and the technical/regulatory/financial challenges of future forms of public safety networks and emergency communications.

A couple of quick thoughts I’ll expand on in other posts or reports in coming weeks:

• IBM made a great point about using IoT events to trigger a separate WebRTC communications session, eg a temperature sensor in a machine kick-starting a video/audio session, when it hits a threshold
• The fragmented nature of US emergency communications tells me that while 911/NG911 will remain as “lowest common denominator”, we will see various other higher-level emergency apps on smartphones for particular uses. Ideally, there would be an emergency API that developers could use inside any mobile app, as well as having support for the native dialler
• Interesting presentation & ideas by Thomas Howe about the use of automated interaction with businesses via SMS (see just justkisst.me) 
• Great presentation from Chris Rezendes about IoT - using the fascinating example of water metering/monitoring, also also asserting the resurgence of SMEs
• As we go towards 5G (& also SDN), we’re seeing another attempt at defining “quality classes” in networks – but what is the right “level of abstraction” to encourage app-developers to be interested in network performance? And do developers actually want to ask for certain QoS levels (or even pay for it)? There seems to be a good argument that developers want to have something like a “network status API” that allows them to manage variable network conditions, rather than necessarily ask for specific quality or assurances.

I also did an interview with NoJitter during the event, about contextual comms - there's a great write-up by Beth Schultz here.

I go to a lot of good events, but I have to say that overall this was one of my favourites when it comes to understanding “what’s next?” in communications, without an overdose of corporate spin. In some ways it reminded me of the old and much-missed eComm conferences. 

Many thanks to the organisers - I’ll definitely be back next year, especially as Chicago is such a great city to hang out in for an extra couple of days. (The picture below is one of mine taken from the lake with #nofilter, as Instagram would say)

A new "killer app" for WebRTC? Video-identity verification / know-your-customer

I've recently come across an interesting new use-case for WebRTC, which I think could be a major driver of adoption - because it has a very clear monetisation model. It may also be a catalyst for growth of video-based contact centres, beyond the Amazon Mayday-style customer support scenario.

I'm referring to the use of video-authentication for web/mobile transaction security. This is also called “Online Legitimation” and is already widely used in Germany, especially for major financial services transactions such as opening of accounts, or setting up loan agreements, which have “know your customer” requirements.

The user is directed to a short two-way video session with a customer-service advisor, allowing verification of the user's identity against a photo on file, or by holding an ID/passport up to the camera. A code is then sent via SMS for two-factor security. (The latter approach has been approved by the German Federal Financial Supervisory Authority as an alternative to conventional offline legitimation procedures). 

This is very different to a normal person-to-person videoconference or "see what I see" application. It is using a video session (not a "call", really) to compare the likeness of two things (as well as conduct other vocal checks through a Q&A process).

At least four providers have already emerged in Germany (email me for names), and a large number of banks and credit-card companies have signed up with one or other of them. One of them has a price-list suggesting prices of between €4-8 per transaction, depending on volumes expected by the client. As well as WebRTC (desktop and embedded in mobile apps), there are sometimes options for Skype, FaceTime, fallback to Flash and so on.

The regulatory approval in Germany has clearly catalysed a sudden market uptake – it will be interesting to see if this is replicated elsewhere. This has the hint of a “killer app” for video contact centres, especially in finance but potentially also for other sectors such as online casino sign-ups, contract-witnessing, notarisation or other applications where visual ID approval is needed. 

This also fits very well with the move of many services online/mobile channels. It would be ridiculous to require an in-person identity check or notarisation, to set up a new online-only bank account. 

The precise number of relevant transactions requiring "hard" identity proof is a little hard to estimate - but a rough number of a billion annually does not seem unreasonable as a potential addressable market. There is a good argument for WebRTC solution providers to consider lobbying finance regulators or other bodies, to get them to clearly accept video-based "know your customer" processes.

Disruptive Analysis is about to publish an update for its WebRTC Market Analysis & Forecasts report, including analysis of various new & emerging use-cases such as this. Please get in touch to receive details & pricing (or to arrange a private workshop or project on WebRTC) information AT disruptive-analysis DOT com

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Google buying Jibe Mobile is aimed at turning RCS into Android's iMessage

Like a lot of people, I was surprised by Google's acquisition of RCS specialist Jibe Mobile yesterday. Lots of theories were advanced on Twitter and blogs about this last night:

• Wow, Google is recognising that carrier standards, RCS and IMS are the future!
• Meh, it's an acqui-hire for people who understand messaging on Android
• Hmm, forget RCS device-side apps, Jibe offers cloud-based RCS servers to operators - it's Google's opening NFV play! (me)
• It's Google trying to get US carriers to push Android devices more, by acquiescing to demands for native RCS support (even if Google privately thinks it's rubbish)
• It's Facebook- and TenCent-envy. Google thinks it's missing out on messaging-as-social-platform as its previous efforts have been failures (also me)

On reflection I actually think there's a different story here. 

Forget telcos, the GSMA and 3GPP. Google buying Jibe Mobile isn't about carriers at all. They're a sideshow, or perhaps "useful idiots" in this scenario.

Google (I think) has three competitors in mind: Mostly Apple, but also Microsoft and Twilio.

First, let's step back. There are various uses for "messaging" apps on smartphones:

• Basic P2P or A2P text messages, ideally with features like read-receipts & pictures. And ideally free
• Enhanced messaging (not "rich") with better support for things like groups, white/black-lists, security, maybe "ephemerality" etc. Think of WhatsApp, BBM, Telegram and so on.
• Cool messaging (again not "rich" although they might use pictures or video) - things aimed at "lifestyle", flirting, self-expression, teenagers, and perhaps content streams. Instagram and SnapChat go here.
• Messaging as a platform, where users don't just send messages but can also use mini-apps or plug-ins inside the system for purchases or collaboration. WeChat and arguably Slack (in enterprise) fit in this category
• Messaging-as-a-feature, where messages get embedded into other applications or services via APIs, or are implemented natively. Twitter direct-messages are an example, but there are many others - perhaps even including iOS and Android push notifications.

These are imprecise categories. They overlap, and app providers try to push up from one type to the other - for example the content channels on SnapChat.

But right at the bottom of the list is basic P2P messaging. Traditionally the home of SMS (& MMS). It's been cannibalised in a lot of places by WhatsApp or close equivalents, although in places with flat-rate charging for SMS it's been more robust. But there is one important other player here: Apple iMessage, which gives an SMS-integrated experience built into iOS. iMessage is a well-designed, moderately "enhanced" version of SMS that is free between Apple users and has some better features (delivery notice & typing-awareness) than ordinary SMS whilst having a near-identical UI.

While Apple doesn't monetise iMessage, it makes usng iPhones a bit nicer. It does what the telecom industry should have done 10 years ago, and improved SMS without focusing on "multimedia" as a first step. It's the little things that count in messaging - ticks when someone has read something, an indicator that they're composing a reply and so on. Fripperies like file-sharing and "see what I see video" are irrelevant in 99.99% of use-cases. Get the basics right - usable texts & the occasional picture. Maybe an audio-message function for people with awkward languages that don't fit keypads & predictive text very well.

Now Google has had its own Hangouts messaging app on Androids in the past, which can be used as a default SMS app as well. But compared to iMessage, it hasn't been especially well-received, as it's optional. This means that Apple's automated and familiar green-becomes-blue messaging experience for Apple-to-Apple communications hasn't really been replicated in Android.

I suspect that acquiring Jibe Mobile (with RCS) is an attempt to change this. I think Google wants to use a service which handset vendors already accept being integrated "natively" to become its own free Android-to-Android messenger.

The fact that the mobile operators want RCS to be natively implemented is even better - Google gets the telcos to lean on all the handset OEMs to accept it. 

But of course, the devil is in the detail of the implementation. I suspect that a future version of Android will support RCS as a default app not because of its "richness", and not because of its "interoperability", but because it allows Google to compete with Apple on basic device-to-device enhanced and free texting. Messaging that goes via its own cloud most of the time, or which might interact with the telcos' networks either for "AndroidRCS-Out" or fallback to SMS. 

In other words, this turns RCS from being a "service" into being a basic messaging function within Android. It's not about "richness", either - video chat on Android will still be on Hangouts and via its WebRTC support 99.9% of the time. Google undoubtedly knows that RCS isn't really the basis of a "cool" messaging service either - I highly doubt it wants to compete with SnapChat, at least to begin with. It's not about lifestyle or messaging-as-platform - just a well-integrated way to do free basic messages.
 
So my views is that this is all about creating Google's iMessage, not a ringing endorsement of telco-run RCS or IPX or any of the other industry machinery. The telcos may get the scraps of RCS-in or RCS-out, most of which will be converted back to plain old SMS to terminate on iPhones, or older Androids.


There's also a secondary set of targets here, I think: B2C, B2B and A2P messaging. I'm sure that Google has noticed Microsoft linking Skype and Skype4Business and its other cloud properties. In future, businesses running Microsoft-powered UC or contact-centre software will be able to directly reach out to end-users via Skype, bring messaging, video, presence and so on. I don't think MS really cares so much about person-to-person Skype any more - it's nice, but not really monetised and faces lots of competition. But B2C Skype is different, if it entrenches Microsoft's enterprise platforms and gives businesses a rich (and free) way to talk to customers. Goodbye toll-free numbers, for a start. It also helps Microsoft become a more full-fledged UC player for internal enterprise communications.

I think that Google wants to do the same thing, linked to Google Apps for Work and other services. And having a native "AndroidRCS" (not "TelcoRCS") capability in every device will help. So perhaps, Jibe is intended to become Google's equivalent of Skype. And again, the likely majority scenarios would be internal within the Google ecosyste, plus a small minority of in/out to the telco (or enterprise SIP) domains.

Lastly, I wonder if this is an oblique way to compete with Twilio and a few other PaaS providers. Using a cloud-based messaging platform linked to a native client in Android gives a whole set of possibilities for developers to do free A2P messaging - basically a version of push notifications for people who don't have an app installed. Or easy, free web-to-device notifications (something missing in WebRTC when the user is outside the browser). And again, there is little reason to involve the phone networks except as exceptions or gateways to/from SMS on other devices.


In summary - this isn't a win for GSMA and RCS. It's not "fighting back against the OTTs". It's not going to suddenly revolutionise the market for messaging and promote the hoped-for renaissance of subscribers paying for "richness". It's not about video-chat or filesharing. It's not about QoS. It's not going to compete against SnapChat or Instagram or WeChat. (That traffic has gone to apps that are simply better and cooler. It might get a bit of basic text back from WhatsApp, but not much, as that's the cross-platfom winner in markets with a mix of Androids and iPhones).
I believe that, in fact, this is Google "stealing" RCS for its own purposes - free basic Android-to-Android messaging, with free B2C and A2P messaging to follow. It can vault into the big league with a billion AndroidRCS text users. The amount likely to touch the telcos' IMS's will likely be minimal. And the GSMA has done all the hard work encouraging the handset OEMs to support it. Thanks guys.

(And of course, there's also the very high probability that the whole thing is a total dud, or that users just ignore it, or only gets implemented in a sub-set of Android devices. Google's record here isn't great - think about Wave and Google+ debacles)

Dean Bubley & Disruptive Analysis specialise in analysing the future of voice, video & messaging, including VoLTE, WiFi-Calling, WebRTC and Contextual Communications. If you are interested in a private advisory workshop or project, please contact information AT disruptive-analysis DOT com

Post-VW thought for the day: more software will detect tests and reviewers

A very quick post today. 

Everyone is watching the VW scandal evolve - the company appears to have programmed some of its cars' engine management systems to work out when they were being tested for emissions. And then put the vehicles in a special mode to "game" the tests, before switching back to "normal" (more-polluting) modes afterwards.

I suspect that's the tip of the iceberg. And that the iceberg is going to grow.

I'm not an AI or machine-learning specialist. But I bet one of the easiest things for a computer to "learn" is when it's being subjected to a test of some sort. Tests look different to normal use - formulaic and often repeated. Could be a legal or regulatory test, could be a product reviewer, could be an internal acceptance-test, could be a benchmarking exercise - and so on.

Once the system knows it's being tested, it can then react to try to optimise itself to give a different set of test results.

I once lightheartedly suggested (in 2009) that we'd see broadband networks learn to give maximum speed/QoS to speed-test services. They might also be programmed to "look" very neutral when they see something from voip.regulator.com, but react differently on other occasions. Devices or cloud services might recognise the names or IP addresses (or cookies) of prominent journalists or product-reviewers. Self-driving cars will probably be very good at spotting traffic cops.

I'd be willing to bet that a lot of this type of "gaming" of tests and reviews already happens. VW won't have been the first to think about it.

In other words, testing software will be like giving exams to humans. We'll need invigilators of some sort, to make sure they don't cheat. And testers and product reviewers are going to have to be a lot more subtle, and change/obfuscate their work.

That's going to be a non-trivial problem if we want comparable data. And I haven't even thought about how you invigilate a Turing test to ensure an AI isn't "playing dumb".

VoLTE & WiFi-Calling are just excuses for telcos to avoid real voice/video innovation

Five years ago, I started talking about the Future of Voice, and then subsequently started running workshops with Martin Geddes on the topic. At the time, I found it quite hard to find the right people at telcos/service providers to talk to. Few were aware of concepts such as embedded voice/video, new user-interaction models, developer platforms, or a “post-telephony” world where we all had many ways to communicate, choosing the best tool for a given job.

There was no “product manager” for telephony, and nobody with responsibility for communications services innovation. There was no "VP, Voice" - it was just assumed to be an inherent background task owned by everyone and nobody. There might have been folk in the enterprise unit looking at UC and conferencing, international dial people scared of Skype, and a couple of people in the labs wondering what to do about voice on LTE, but that was about it. Oh, and of course at a handful of operators, there was sometimes some hapless soul trying to push RCS, either internally or at GSMA.

Then, about 2-3 years ago, there was a shift. Various people with titles like “Head of Advanced Communications” started popping up, roughly as the tidal wave of smartphones, messenger and VoIP apps, developer platforms and so on started to take off. A few people had heard of WebRTC, some operators were tinkering with their own early “telco-OTT” comms apps (remember T-Mobile Bobsled?), developer tools were being pushed, and there were signs that some actual innovative thinking was taking place. (And a few hapless souls were still pushing RCS, of course).

But in recent months, that glimmer of positivity seems to have dimmed again somewhat. The bulk of telco announcements recently concerning “advanced” communications has been anything but "advanced". It’s just been breathless announcements about VoLTE or WiFi-Calling, as if they actually changed anything. (And, yes, a few hapless souls are still pushing RCS. Although rather fewer – quite a lot of them have finally escaped the Joyn event horizon). See this recent post of mine for an example.

Let’s be clear – VoLTE has four benefits:

• Offers a solution for 4G-only operators with no 2G/3G or MVNO deal for fallback
• Allows simultaneous voice & data on 4G, rather than forcing 3G fallback for data during calls
• Gives faster call setup time (nice, but the sort of minor feature upgrade that would have been quietly introduced in v6.3 for any other voice app)
• Might eventually help with spectrum refarming. This is equivalent to fixed operators being able to sell big old exchange offices in cities. It allows eventual asset sales / re-use. Eventually.

Beyond that, there’s no new revenue, no change to the basic vanilla 130yr-old format of “phone calls”, and ironically for a standard, very little working interoperability with other operators’ VoLTE. It’s an expensive “forced purchase” as the industry was too slow/complacent to come up with something better, and painted itself into a corner. It’s not going to stop people using other communications apps or services, it’s not going to halt revenue declines or reverse "peak telephony", and it’s still going to take years to transition the bulk of people from circuit. (And no, HD voice is not special – it’s been around on 3G for years, and is another minor feature upgrade nobody pays extra for).

WiFi-Calling is no better. It’s a slightly better implementation of a 10-year old idea, basically UMA v2.0. It gives better indoor coverage for some users in some areas. It covers for a lack of cell-sites or sub-1GHz frequency bands. In other words, it’s window-dressing, not something substantively different. There’s probably 4-500m+ people doing some sort of voice/video communications over WiFi anyway, using 3^rd-party apps. It can in no way be described as “advanced communications”.

Some (fortunately few) are talking about ViLTE – which is VoLTE’s ugly video-calling sister. It’s pointless. The last thing to do with video is to “call” someone like a phone-call, unexpectedly and interruptively. There isn’t even a legacy user-base to pretend to migrate, and it’s clearly not as functional / cool / integrated / well-designed as the 100 other video-chat apps and APIs available, even without the fact that WebRTC means that all apps can integrate video if they need it. I'll skip over RCS as I'm sure you've got the picture by now - but read this if you're uncertain.

And this is the problem. All of a sudden “advanced communications” means VoLTE and WiFi-calling, with a side-order of irrelevant video/RCS. That’s just a convenient excuse not to do any proper innovation. They both just deliver plain-old phone calls, but on different networks. Yes, it’s nice to have better indoor coverage, but covering up for existing deficiencies is hardly worth a press release. It’s like adding a bagel function to a bread-toaster* and claiming a major step forward in cooking technology. Only at least people still think bagels are cool.

In my view, VoLTE and WiFi-calling are “make-work”. They make telco engineering and core network groups look busy. They give an excuse to vendors to try and finally sell their IMS infrastructure – albeit in NFV-based versions at lower cost. The policy vendors get a look-in too, so they can finally prioritise something with network QoS. And there’s the nice comforting mythology of ViLTE and RCS on the horizon to continue the gravy-train. 

And it gives an equally comforting mythology of “level playing fields” to take to regulators. That's nonsense, too. (See here)

Meanwhile, genuine innovation in voice, video, messaging, contextual comms, APIs, developer platforms, enterprise communications, CEBP, WebRTC, cool mobile comms apps, social voice, personal broadcasting, telemedicine, IoT-integrated comms and 101 other areas is carrying on regardless. But on the Internet, or on mobile, or in enterprise cloud-based comms.

But telcos and vendors, with their nice warm VoLTE/WiFi-Calling comfort blankets, can delude themselves they’re doing something “advanced” because they’re spending money and doing “stuff”. But it’s simply an excuse for failing to make hard choices. It’s “going through the motions”.

CEOs and CFOs should call their bluff. If it's just "phone calls" they might as well outsource the voice infrastructure in entirety. And telecom regulators should ignore the protestations about so-called "OTTs", when telcos are doing nothing to try to compete or meet modern customers' communcations needs and purposes. It's the Internet and app providers that are employing a "design" mindset here and need protection, not vice-versa.

Now this is not true of all telcos, nor all SP business units / teams though. There’s still a lot of interest in doing cool stuff with WebRTC, a number of interesting mobile apps by telcos, some interest in contextual communications and developer APIs. Telefonica TokBox, Orange Libon, Telenor appear.in, WebRTC platforms from AT&T and NTT & SKT, Comcast's Xfinity Share, Swisscom iO and various others. For many of these it's still early days - but that's the type of trial-and-error, agile, customer-centric approach that's so desperately needed.

But usually, those initiatives are done by the telcos' more peripheral units – labs teams, enterprise arm, international opco's, TV/content business, standalone developer-platform units, internal MVNOs, so-called “digital services” groups and assorted other teams of free-thinkers unencumbered by legacy mindsets or GSMA/3PPP/ATIS/ETSI doctrine. Often, they have interal battles with the legacy fiefdoms that don't want to risk cannibalisation - or being made to look over-resourced and slow. Politics wins too often. There's also various MVNOs and smaller MNOs, from Truphone to Google Fi, that are trying to do something different as well.

Something similar is occurring in parts of the vendor space too. GenBand has its Kandy PaaS business which focuses on WebRTC for enterprise apps. Ericsson's Labs team is working on the OpenWebRTC mobile stack, and assorted non-telco uses of voice/video. Metaswitch is repurposing IMS as its cloud-based open-source platform Clearwater, encouraging tinkering and developer innovation. 

But plenty of other vendors keep recycling the tired old marketing lines on their ghost-written "content marketing" blogs or webinars about "How VoLTE and WiFi-calling & RCS will help you beat the OTTs". It's cynical clickbait, and either self-delusional or aimed at deluding their customers. Not one has any case-studies - or even a decent argument - about winning back users from WhatsApp, Snapchat, Talko, Wire, Periscope, Slack, Skype & Skype4Business or the 10001 other cool services.

This needs to change. Yes, VoLTE and WiFi-Calling have some value for some operators, mostly because they're forced into it. If they can reclaim spectrum, great. But they should NOT be excuses for inaction elsewhere. They do not redefine communications. They do not open up new revenue streams, or significantly help loyalty. They are, at best, strengthening the walls of the final core communications fortress, so telcos can defend 10% of their former territory against the invaders. Actually, the analogy is flawed - perhaps "liberators" is better, given the alternative are welcomed by users with open arms. The GSMA's so-called "Network 2020 Green Button Promise" is a pre-eminent example of this woefully narrow vision.

VoLTE and WiFi-calling should represent maybe 20% of operators' activity in future communications, not 80%. ViLTE & RCS should both be zero %. The bulk of effort should be on genuine innovation - or else acquisition / partnerships with those who can do it instead.

Yes, this post is confrontational and will no doubt put a few noses out of joint, including those at some of my own clients. But this is important - there's no value in rearranging the telephony deckchairs, when there's a vast iceberg of contextual communications, design-led apps and WebRTC hoving into view. Making a phone call on WiFi isn't going to help.

Apple Upgrade - will carrier activation be done with an eSIM or Apple SIM?

The iPhone 6s still has an ordinary SIM slot. Next year, I predict that the iPhone 7 will still have an ordinary SIM slot too. 

But Apple's new Upgrade installment plan that allows people to get a fresh new smartphone every year might change the SIM in the longer term. It's US-only to start with.

There is also a possibility of a removable Apple SIM as part of the Upgrade plan - a similar concept as the one in last year's iPad. That's more likely for next year rather than this year.... but at the time of writing this post (11th September 2015) Apple still hadn't put up the full details of how "carrier activation" would work on the web, so it's *possible* that there will be a surprise coming much sooner (maybe even tomorrow, when pre-orders start).

There is also a possibility that the iPhone 7, next year, will have an embedded "eSIM", although it would also need to have a proper SIM slot too, or at least two versions to choose from.

The Upgrade programme makes a lot of sense - most US carriers now have some form of installment plan for smartphones, rather than a bundled-in "subsidy". That's actually been part-driven as an effect of changing accounting rules, which restrict the bundling of products and services in reported revenues. See this article here from last year, and my own 2007 post where I mused about the economics of phone subsidies, here.

The Upgrade plan allows customers to get their iPhone finance plan from Apple, rather than through AT&T, Verizon, T-Mobile or Sprint. (For Apple, it's actually a lease underwritten by Capital One). The one-year cycle allows Apple to potentially increase revenues, while running this through the Apple stores removes the risk of last-minute switching to Android devices, with a nudge from a carrier salesperson who's been incentivised to pitch Samsungs.

But a couple of things are left unsaid at the moment. When Apple talks about setting up and "activating" your phone on the carrier of your choice, what does that actually mean? 

For some users, it will just mean taking the SIM out of your existing 5s or 6, and popping it into a shiny new 6s. But what if you want to switch to a new carrier - or perhaps a new plan? Will the Apple store keep a stock of SIMs from all the carriers and activate them on the spot, like an independent phone shop? Or.... will it perhaps use Apple's own SIM, with a remote-activation setup menu as on last year's iPad? [EDIT: it has been pointed out to me that Apple already stocks some SIM cards in its US stores. Question remains though, which plans? Including prepay or just normal multi-year contracts?]

[My take on the Apple SIM last year was posted here. As I argued at the time, it has not been a big deal. Other carriers have not signed up, beyond a provider called GigSky, which appears to work with major global carriers like Digicel and Vodafone on a roaming basis]

In theory, and with the cooperation of the carriers, the new 6s could work with an Apple SIM card as well. Rather than walking out of the Apple store and then going to a carrier store for a SIM separately, it would be easier to just remotely download and activate a "profile" on either a blank (Apple-branded) SIM, or in future, to an embedded SIM chip inside the body of the phone. Ideally, Apple would love to do away with the design compromises from cutting a slot in the device, reclaiming space and removing a clunky mechanical component.

However, various scenarios here would require some complex behind-the-scenes processing, like porting your existing mobile phone number, and also maybe dealing with contract termination fees. This is why I have my doubts that it will happen this year, and even next year will have some headaches. They're not insurmountable for Apple - but they probably are insurmountable for others, for anything other than IoT-type deals like Samsung's Gear S2 watch with eSIM from last week.

Either way, whether it's this year or next, the Upgrade plan gets customers used to the idea that you "activate a carrier" on an iPhone bought from Apple. And given that there is no subsidy or payment plan from the carrier, there is no justification for 2-year contract plans, either.

If you have an unlocked iPhone, you'll be much more amenable to getting a rolling and cancellable 1-month contract (already popular in the UK and elsewhere, but less-so in the US) or even a full pay-as-you-go prepay account. You might even choose to go for a data-only SIM, and "bring your own voice".

In that scenario, it actually doesn't really matter (for now) which SIM model Apple uses:

• Swap out your existing SIM & put it in the new iPhone, in the Apple store
• Buy a SIM from a carrier store & put it in the iPhone
• Buy a SIM sold in an Apple store & put it in the iPhone
• Get a removable Apple SIM supplied with the iPhone, activate a carrier if it's chosen to be on the menu, or else take it out & buy a separate SIM as per the options above
• Have an eSIM inside the phone and activate a carrier of your choice, if they're on the menu. (If not, then there's probably a version with a proper SIM, as some countries' operators won't all be eSIM-ready anyway).

Long, long term (maybe 2020 to coincide with 5G) we might get to the "promised land" (or dystopia, depending on your viewpoint) of fully virtual SIMs, but don't hold your breath.

The problem with the eSIM / downloadable Apple SIM type model has always been getting carriers to agree to be involved. I've been skeptical that the model had legs, because of this. But the installment / upgrade plan - and Apple's footprint of own-brand stores - seems to be a victory thought up by a clever game-theorist.

One of the carriers will likely agree to in-store activation on Apple SIM / eSIM - or at least, agree to having their SIMs stocked in Apple's retail outlet. It saves customers a second shopping visit. And then the other carriers may be forced to follow suit. Given that at least *some* people will be able to activate their 6s "on the spot" by simply swapping out their existing SIM, there's even greater incentive to use the Apple Store as a point of decision, if you're trying to capture people ready to churn.

Apple has essentially flipped the cellular sales model on its head - rather than a Verizon/AT&T salesperson having the power to convince a user to switch to a Samsung in a carrier store, it's now in a position to convince users to switch to a different carrier, in an Apple store.

The interesting line on Apple.com is this: "Because the iPhone Upgrade Program isn’t tied to a single carrier, you don’t need a multiyear service contract. If you don’t have any carrier commitments, you’re free to select a new carrier or stick with the one you have. A Specialist can answer questions and help you set your iPhone up the way you like." Note the absence of the word SIM, and the phrases "select a new carrier" and "set up your iPhone". That's rather significant - it implies the SIM is available in-store, in some fashion, for the carrier to be "selected".

So in many ways, the actual SIM mechanism is irrelevant here - it's the retail footprint that matters. Lots of carriers are worried about the eSIM / Apple SIM meaning they "lose ownership of the customer", but the truth is more prosaic: it's the physical store that's the point of control / decision, because it plays to the human psychological need for instant gratification. Even online purchases are clunkier - unless you have same-day delivery, there's an in-built lag for activation anyway. Of course, it's also important that other device vendors don't have a similar retail presence.

Now obviously, the Upgrade plan isn't actually needed here. Nothing stops people from walking into an Apple Store and buying an unlocked phone at full retail price & getting a SIM card however they want anyway. But in the US at least, that's still very much a "minority sport", because of the price tag involved. It's just not how people buy phones, when they're accustomed to an apparently "free" or cheap handset. The monthly plan - and upgrade cycle - might change that, as it alters perception. It's also a clever lead in to some form of programmable SIM card, when it's worked out the various kinks and practicalities.

I suspect that Apple isn't 100% sure how customers will take to this. And it's probably ironing out various kinks and complexities with any sort of remote activation. It may want to wait until all the carriers have back-end systems capable of handling it, rather than risking relationships by jumping the gun with just one or two. Again, the game-theorists are probably trying to work out how to avoid one or more carrier stopping selling iPhones entirely in their own stores, which would have definite negative impact, in the short term at least.

My view on programmable SIMs / eSIMs is that business model is pretty much unworkable, except, perhaps, for Apple. Let's see what happens either next week, or next year.



I've been doing a lot of work thinking about SIMs, eSIM, programmable SIMs, multi-IMSI and so forth recently. Over recent months, I've done a variety of private consulting projects and presentations on my thoughts on SIMs. I've been looking at the announcements, and also considering what the commercial, technical and regulatory implications of various evolution paths might be. If you're interested in a workshop on this, please get in touch via information AT disruptive-analysis DOT com