Apple has reportedly given up on releasing an iPhone with a built-in SIM card. Instead, the company may focus on installing the SIM card into the iPad 3G models instead.
Currently both the iPhone and iPad 3G use a micro-SIM card provided by carriers such as AT&T, O2 and Vodaphone. However models sporting Apple pre-installed SIM cards would bypass the carriers during the sales process altogether, allowing the consumer to buy the iPhone directly from Apple and then pick a compatible carrier. This eliminates the two-year ball and chain (contract) and any possible early-disconnection fees.
Naturally mobile carriers aren't too thrilled with the idea, and have reportedly threatened to discontinue subsidizing. This means consumers would be required to purchase the iPhone at its original price, thus possibly reducing iPhone sales overall and forcing customers to find a cheaper alternative.
"Apple has long been trying to build closer and closer relationships and cut out the operators," said an unnamed "senior" source at a mobile operator. "But this time they have been sent back to the drawing board with their tails between their legs."
The source now claims that Apple has abandoned the iPhone plan and will move ahead to launch an iPad 3G with the integrated SIM card during the holiday season, or in early Q1 2011 (likely the latter). Apple can release SIM-based models without any backlash because the tablets aren't currently subsidized by any wireless carrier.