In an exclusive interview with Ina Fried at All Things D, France Telecom CEO Stephane Richard confirmed that Apple has agreed to scrap a plan to get rid of physical SIM cards by using a new kind of micro-SIM card in future iPhones that's even smaller than the current micro-SIM card being used in today's models.
Last week an France Telecom executive announced that Apple had submitted an application to a European regulatory board, European Telecoms Standards Body (ETSI), for approval to use a smaller micro-SIM card; with broad support it could get approved within months instead of the typical year it takes.
According to Richard, carriers want SIM cards because they are "critical" for security and authentication.
It's no secret that Apple hates SIM cards—it adds bulk to its iDevices—but carriers make lots of money by selling SIM cards. Apple infamously tried to get carriers to allow it to embed a virtual SIM card in its iPhones, but European carriers, like France Telecom, reportedly threatened to stop selling them, according to AppleInsider.
"All of us told them it was a bad idea because the SIM card is a critical piece of the security and authentication process," he said. "It would be very difficult for a telco or carrier to manage the customer relationship. I think that they understood this point. We had a very constructive exchange and dialogue with them."
"We are going to work with [Apple] in order to standardize a new format of SIM which takes into account our needs with security and authentication and also is compatible with their wishes in terms of size," Richard said.
Then in November, rumors surfaced that Apple and Gemalto were developing a proprietary SIM card that Apple could embed in all its devices, thus letting consumers purchase and activate iDevices as soon as they paid for them at Apple's retail stores.
Last January, CEO Steve Jobs introduced the micro-SIM card (known in the industry as a 3FF or "third form factor" SIM) when he announced the iPad. The ETSI developed the micro-SIM card to fit into devices that were too small and thin for the standard, larger 2FF SIM card. Today, micro-SIM cards are used in the Apple iPhone 4, iPads, and T-Mobile's Lok8u nu-m8 children's GPS wristwatch.