Integrated SIM in iPhone?

Some rumors floating around say that Apple thinks of integrating the SIM card into the phone. Unfortunately the entities distributing this rumor have no clue how GSM works. The SIM card is a vital element in the GSM network. The SIM card represents the subscription. A phone which connects to the network uses the SIM card for authentication. It is thus the key to your phone number and subscription. The interchangeability of the SIM card came from the fact that people want to change phones often. Remove your SIM and put it into a new phone and you are online within seconds. If the SIM card is built into your phone, you are locked down to the opening hours of a operator's store. Also you can only use the phone with the integrated SIM card with the operator your phone supplier wants to cooperate with. This would break all rules of a free market.

Secondly the SIM card represents a vital security key. If you can copy the sim card (assuming its emulated in software in the iPhone and you can jailbreak it), someone could write a "virus" which collects all encryption keys from all iPhones and could make expensive phone calls on the owner's cost. This would be a vital threat and empty your wallets. The SIM card uses an encryption key and encryption algorithm which is controlled by the operator. There's a matching entity in his network which does the same encryption. Most operator use the standard GSM encryption algorithm for authentication but some don't to not be vulnerable if that one gets broken (the older one has been broken, the newer not yet). In addition to that, the SIM card has additional functionality such as prepaid functions which allow you to get your credit limit in a menu, it holds predefined adressbook entries, can authenticate as multiple subscribers (so called proxy-roaming) etc. This means the SIM card is a highly flexible computer with extensions possibly done by every single operator based on their offerings or ideas. This would all no longer work if people would have to use Apple's integrated SIM card.

The biggest advantage of having SIM cards are:

1. I buy a new phone today and pop in my old sim card and can make a call a few seconds later. Operator doesn't have to do anything for that. It just works.

2. I can put in a new SIM card from another operator into my phone at any time and be online with the new subscription within seconds. This comes handy if you travel to other countries and want to use a prepaid lcoal number in that country. Imagine you would have to buy an iPhone for that every time you travel to another place.

3. Network operator can extend the functionality based on his offering and can choose another authentication method.

Integrated SIM card would ruin all those advantages. That's why I think it will never happen. Apple would lock themselves down to very few operators as the mainstream would not adopt it for sure.

What's more likely the source of this story is the fact that Apple works on a iPhone which does not have a SIM card at all. The logical reason why this could be the case is a CDMA iPhone. In CDMA there are no SIM cards. If a CDMA subscriber wants to buy a new phone, he has to buy it from his operator and have his subscription programmed into it. But programming the subscription into the phone was seen last in C networks in europe (analog networks with digital signaling) and has been abandoned long ago when GSM came online in the early 90ies.

The SIM has been invented for good reasons. Apple changing that is just not going to happen. It would open too many doors to security treats and cause massive compatibility issues and limits the market.