Apple took another chip at the carrier business model Thursday, allowing users to change carriers for wireless connectivity anytime, for any reason at all, on new iPad Airs.
Previous generations of iPads allowed users to sign up for short-term pay-as-you-go contracts for periods of one month or a quarter. But the user had to select a carrier at the time they purchased the iPad -- tablets made for the Verizon Communications Inc. (NYSE: VZ) network, for example, wouldn't work on any other.
But the iPad Air 2, introduced Thursday, includes a universal chip that allows users to choose one carrier one month, and another carrier the next month.
Apple calls the chip the Apple SIM, and explains:
The new Apple SIM is preinstalled on iPad Air 2 with Wi-Fi + Cellular models. The Apple SIM gives you the flexibility to choose from a variety of short-term plans from select carriers in the U.S. and UK right on your iPad. So whenever you need it, you can choose the plan that works best for you — with no long-term commitments. And when you travel, you may also be able to choose a data plan from a local carrier for the duration of your trip.
In other words, if your customer doesn't like you, he can go to your competitor just about anytime.
Apple has been chipping away at the loyalty that connects US consumers with their wireless carriers since the introduction of the iPhone in 2007. Until the iPhone, most consumers picked a carrier, signed a contract, and got whatever phones the carriers had for sale. But the iPhone reversed that relationship -- many consumers wanted iPhones and selected whichever carrier would give it to them.
This new development from Apple diminishes customer loyalty even further, and means carriers will have to work harder to keep customer business.
On the other hand, carriers have sold a ton of iPhones and iPads, service plans to go with them, and launched the smartphone era with its proliferation of products and services for carriers to sell. This latest development will be good news for carriers who win customers with quality service, and bad news for carriers who rely on contract lock-in to generate revenue.