Opinion: The Australian Apple Watch 3 Will Have an eSIM Inside

apple esim

A quick summary of Apple and their eSIM saga

  • Apple have successfully pushed the entire phone industry to adopt a piece of technology which will work to their advantage:
  • The 2017 Apple Watch will feature an Embedded SIM (eSIM).
  • The specifications for the technology are now widely available. In fact the second set of eSIM standards has already been agreed by the GSMA.
  • However, now, Apple are faced with the challenge of how to integrate the new capability in a way which doesn’t confuse their customers.
  • And having a range of providers (phone companies) in Australia who offer data plans which will suit the device.

The Apple Watch and The eSIM

Source: https://www.pexels.com

The Australian Apple Watch (Version3) set for release in September 2017 is going to have an eSIM.

The major difference from a user’s point of view is that they can now access the internet directly from their Apple Watch, rather than needing to pair it with an iPhone. The most likely use cases are circumstances in which the user is exercising or has laid their phone down and is away from it at the time they want to use the watch.

Here are the specifics of what we now know about the eSIM in that device :

  • It will be an eSIM :
    There has been speculation of the arrival of the eSIM in a new Apple product for some time now. In other articles, we have considered the major alternatives which could have been used in the Apple Watch. Major ‘equivalents’ could have included the Apple SIM and other soft/programmable SIMs. It is now understood that the watch will feature a pure ‘eSIM’. That means there will be no physical SIM in the watch and the user will pick an operator and plan from settings.
  • Space saving:
    eSIMs are physically smaller than their even Nano SIM physical equivalents. That means the new Apple Watch is able to retain the same physical dimensions ( 38mm x 42mm ) of it’s predecessors. Other. Previous watches with built in physical SIM trays (for example the LG Sportwatch) have had to be delivered in larger physical form factors in order to accommodate the SIM tray and the electronics to read it.
  • Data Only:
    The Apple watch will support data only, so no Dick Tracy watch talks. Obviously, users will be able to use Skype and other VoIP apps from their wrist if they’d like to. It is unclear yet whether Facetime will be supported.
  • Quallcom Chip:
    In a break from Apple’s previous supplier(Intel), the Apple Watch’s eSIM is likely to be built into a Quallcom chip – which has better power performance so your battery will last longer. The significance of this goes well beyond the current watch. Once eSIMs are available in this format, every manufacturer will start including them in their devices. We believe eSIMs will be commonplace much sooner than was previously forecast. In everything from Android phones to Internet Of Things devices and laptops of all shapes and sizes.
  • There will be a ‘non eSIM’ version of the Apple Watch 3:
    Apple will also release a version of their watch which does not have

 What plans can the Apple Watch use ?

‘Our estimate is that the new Apple Watch will require a data only plan with up to 500MB per month of data.’

No plans have yet been released at the time of writing. It can be hard enough for people to estimate their data usage on a phone they have had for some time, let alone for a watch which has only been connected to the internet through iPhones previously.

Assuming regular usage of the watch but no video content – the screen is too small to usefully present that – we would assume that the most data intensive use would be GPS / maps and that 500 MB a month would be sufficient. As always, we would recommend a prepaid plan to offer a hard stop when the data threshold is reached just in case you find your usage differs significantly from this estimate.

Data should cost you $5 to $10 a month.

You can get a 500MB data pack from Lebara for around $5 a month.

What phone company should I use for my Apple Watch eSIM?

We usually suggest smaller phone companies for most SIM needs. However, in this circumstance, bigger phone companies seem more appropriate.

  • Most likely to be available:
    It will take a while for the industry to get used to the eSIM. Smaller phone companies will need to negotiate deals with the wholesale arms of the bigger phone companies in order to get access to it. The major ‘retail’ brands you know, Telstra, Vodafone have been testing the eSIM for some time and will certainly have plans at launch.
  • They have data sharing facilities:
    Something the big phone companies have that smaller phone companies often don’t, is a data sharing facility.This could be extremely useful for circumstances such as those presented by the Apple Watch’s eSIM. It seems likely the major brands would offer a $10 per month extra data under their shared plan scheme at launch.

The Apple eSIM

The latest Apple Watch will be available in Australia later this year. It looks as if Apple is going to install an eSIM (or ‘Embedded SIM’ – a SIM that is embedded in the watch and cannot be removed) in it, rather than a physical SIM, although this hasn’t been officially confirmed by Apple yet. The Apple Watch 3 looks set for release alongside the 10 year anniversary iPhone. There has been a lot of talk about eSIMs recently, but actual use of one in such a small device hasn’t materialised before now. It’s not surprising Apple are first to market with such an innovative product.

The eSIM isn’t an entirely new concept either to Apple or the broader industry. The concept has already undergone considerable research. It has been in use since last March (2016) in the 9.7-inch iPad Pro, Wi-Fi + Cellular model. That particular roll out was not a storming commercial success. Despite that, it seems that it is likely that the eSIM will be included in the new generation of Apple Watch.

Apple have been the brains and brawn behind the push to have the GSMA ( If the world of the SIMs, including phone companies, you, Apple and so on is a school, the GSMA is the headmaster) allow the new eSIM standard within the telco industry. Apple have been pushing it for 10 years. Phone companies (‘Operators’) from around the world resisted as long as they could. Then their eyes widened at the opportunity presented by the IoT, (the Internet Of Things) made more readily available through the eSIM and decided to give in.

When you think about it, the idea of going to the shops to buy a SIM is weird. Smartphones are little computers and they’re connected to the internet all the time. Everything that is written on a SIM and can be used to connect you to the phone company has surely, always be available for remote delivery.  With an eSIM, that’s exactly what will happen. There will be no need to go to your local Coles to get a SIM. You’ll be able to connect your phone to a plan through settings.

Apple, like most phone manufacturers have a number of motivations for wanting an eSIM. They have a desire to make their phones more waterproof and cutting out a removable SIM tray will certainly do that. Reducing the number of ports (again, by removing the SIM drawer), will help them gain space in the watch – one of their smallest products. Firther down the line The impact of saving the space a SIM would otherwise take up, on the size of a phone might seen trivially small to you, but it isn’t to Apple. If you look at their behaviour for the last 10 years, they’ve been moving us to smaller and smaller SIMs for a long time. Apple invented the Nano SIM, afterall.

The end user benefits of eSIMs include enormous savings of time and money. Connecting to a phone plan, from your watch, while sitting on your sofa rather than taking a trip in to town for a SIM will be a boon for most people. However, there is also the question of cultural adoption (how readily people will accept eSIM technology) and easing the path for people who might find the change from a physical SIM world to a non physical SIM as difficult.

Apple  appear to have played with two different methodologies of implementing the eSIM. There is some commonality between the two approached they’ve tried. Both were ‘half way houses’ that offer the benefits of an eSIM without requiring users to take it in the first instance.

What is an eSIM?

An eSIM is short for “embedded” SIM. The eSIMs presence in the new Apple Watch means that there is no removable chip (such as the present SIMs that you buy.) eSIMs allow users to pick a phone company and plan from their device. Instead of removing and inserting a physical SIM, the idea with the eSIM is that the phone (in this case watch) receives software that changes the characteristics of the eSIM. The SIM profile you need to access your iPhone’s network is downloaded over the air to your handset. (This process is known as provisioning the device in the industry)

An eSIM in the new Apple Watch would mean that more than one phone number can be stored, like a dual SIM phone, but without the need for more electronic bulk.

The first eSIM alternative Apple tried: The Apple SIM

The Apple SIM originally appeared back in late 2014. That’s an eternity ago in the world of consumer technology. The Apple SIM is what drew my attention to the whole area of the eSIM. It seems clear to me that Apple has been experimenting with the customer acceptability of their proposed solutions for some time.

In a small number of countries, primarily the UK and USA, Apple added a new type of SIM (the Apple SIM) to two of it’s data only devices, the iPad Air 2 and iPad Mini 3. The new facility was simply an addition to the Nano SIM card that had been present in multiple previous devices. What made these devices capable of calling themselves ‘Apple SIM’ iPads was the tinkering Apple had performed on the Nano SIM. The Apple SIM had some notable differences to SIM cards which had preceded it. As well as the Nano SIM, the device supported an eSIM. Also :

  • It was made by Apple: Importantly, the Apple SIM was a physical SIM provided to people buying an iPad by Apple. The Apple SIM was not provided to the user by a phone company. That’s quite a big deal. It’s like BP building a small car…
  • You could connect to more than one phone company without leaving the house: Just like the eSIM, people with an eSIM could connect it to ‘a selection’ (a small selection) of new phone companies, direct from settings. (Unlinke an eSIM, the Apple SIM was a physical SIM which was pre-programmed with the settings for the phone networks they attached to. )
  • You could also swap it out for a physical SIM: Users with an Apple SIM can swap out the physical form factor Nano SIM which had the Apple SIM settings, for a physical SIM from their phone company if they wanted to.

So, the Apple SIM had some features which were the same as an eSIM and some features which were the same as a physical SIM.

Two years later, Apple filed a patent for a Dual SIM – Separate eSIM / hard SIM

Two years later, in 2016, Apple appeared to take the next step. The patent for their new idea is pending, as reported by Chris Smith on the website BGR. It appears that Apple now want to allow EITHER an eSIM or a full, classical, physical SIM (of the sort to which are now used) as the network connection from their devices.

This is subtly different to the Apple SIM in that the Apple SIM could not be programmed over the air, electronically as the eSIM can be. A patent was issued in the U.S. earlier this year which allows Apple to use two phone numbers in “some devices”, for example, for “business and for pleasure.” The patent mentioned the names of three Apple cell phone engineers, Li Su, Guojie Dong and Ming Hu. Li Su was also mentioned in an application lodged with the State Intellectual Property Office in China for a dual SIM card feature. This office is the equivalent of a patent office in China.

There have been a couple of indicators this year which suggest at the very least that Apple is thinking about using the eSIM as its next tech step. Afte rall, just because Apple applies for a patent, it doesn’t mean that it actually uses it. There was a patent for a dual Sim before the iPhone7 came out, for instance, but when it did, the 7 was virtually the same as its predecessor, the iPhone 6, with a few superficial changes.

Here’s how it would work in the new iPhone


iphone 8 new iphone

Why are Dual SIMS Popular in Parts of Asia?

Dual SIM smart phones are very popular in both India and China and the markets are both huge and expanding rapidly. Phone users in those countries like the dual SIM technology because they can use one number for business or work and the other for personal use. Apple iPhones do not currently  have this technology, which puts them increasingly at a disadvantage with other local phone companies, like Oppo and Vivo, which are providing dual SIM phones. Apple’s smart phone sales dropped by 30% alone in China last year, a trend which cannot be sustained if Apple is to retain any sizeable sort of market share.

One of the reasons why Apple hasn’t developed dual SIM technology is because of arrangements with carriers which lock phone access to the carrier.


Apple May be Changing Tack on Dual SIM

Apple may now be planning to change their tactics if news filtering through about patents they have applied for are followed through. Apple applies for patents quite frequently and just because they have applied for a particular patent doesn’t automatically mean they will actually incorporate it into a new product.

In subsequent iPhone versions, Apple could use the same eSIM facility they are employing in this year’s watch in the next version of its popular iPhone range. They could employ dual SIM or eSIM capability or both. Having both dual SIM and eSIM capability would mean that Apple would be doing something that none of its competitors in the smart phone category have done or are even contemplating doing.

Why the e-SIM was chosen for the Apple Watch

A watch is an accessory that goes wherever you go, more so than even a phone. Being a relatively small device swapping SIM cards would be far too cumbersome, so the obvious answer is to use an embedded SIM. An eSIM not only lightens the weight of an Apple Watch, but it makes it far easier to handle.

Ensuring the watch is completely waterproof makes use of ithe product simpler, too. It is possible, on the other hand, that the eSIM facility will reduce the amount of time the battery in the Apple watch can keep the device lit up. With that in mind, it appears that Apple may be taking on board data and VOIP using a CAT-M1 connection which offers improved battery life. Apple is also likely to push for inter-operability with its AirPods which will be released in May. These will be able to receive and make calls. This sort of integration between an Apple Watch and a cellular connection will help wearers use a different set of controls when interaction is taking place in such a small device with a tiny screen, even though it is a touch screen.

What do the telcos think about Apple including an eSIM in their watch ?

Up to now, individual telcos have had more control over devices. Once customers have purchased a network provider’s SIM and tied themselves to a contract it’s hard to get out without forfeiting varying amounts of money. Apple is starting to put an end to this type of monopoly with the roll-out of the eSIM technology.

So far, this seems to have been backed by major telcos like the U.S. based Sprint, AT&T, and T-Mobile, as well as the U.K.’s EE, Japan’s AU and SoftBank and not forgetting Hong Kong’s Three network. With GigSky a pay-as-you-go network provider recently agreeing to the Apple eSIM, it now covers at least 140 countries and regions worldwide.


How we got here – the Samsung Gear S2 smart watch

Samsung, not just Apple are moving towards the integration of soft SIM technologies in their next generation devices. In the case of Samsung, the process started with the latest version of their Samsung Gear S2 smart watch.

Samsung’s approach with their watch suggested they were prototyping e-SIMs in real life scenarios. It’s appears from their behaviour that Samsung used the Gear S2 as a testing ground to iron out any bugs in the soft SIM technology, much the same as Apple did with their latest next generation iPad.

Both of these two products could lead the way if testing is successful, for the full roll out of eSIM functionality in the next generation of smartphones. the Gear 2 is a piece of technology which brings home the fact that there will be many things connected to the internet for each person. A watch is a great example of the phenomenon. Technically wrist watches are small and don’t have a large amount of internal storage space, the same as larger smartphones do. By removing the need for a physical SIM card and by utilising soft SIM tech, smart watches can be constructed slimmer, smaller and with less weight.

Finding the extra space to fit the SIM housing and messing around with adding it and taking a SIM out would be a materially large part of the hardware on your wrist. So it made sense to test the customer experience of set up and use on a small device – like the Galaxy Gear 2. E-SIM functionality allows for the entire process to be much more functional and user friendly.

It’s usually easier to adopt new technology in consumer lives than in business. If you’re a consumer and you like a Samsung Gear watch, you go down Harvey Norman or JB Hi-Fi and buy one. If you’re a business and you would like a Samsung Gear watch, you do a business case, get it signed off by governance, submit it to procurement, wait 6 months for a competitive tender, pick a winner, develop IT support procedures for a Samsung Gear watch and then roll it out. The entire process takes a lot longer. But, this watch shows that businesses will need eSIMs soon too for all their connections to the internet.


How did Samsung’s early eSIM enabled trial go ?

The Samsung Gear S2 watch was released in three different variants. Only the highest of the 3 models contained inbuilt eSIM. The operating system was unique to the Gear 2 Watch and was based on a fork of Android and is a perfect choice for this device launched by Samsung.

The Samsung version allowed users functionality to make and receive calls and use GPS features natively, on the watch, without the need for a local smartphone to pair with. The Gear S2 3G also featureed a 20 percent larger battery (which we mentioned the Apple Watch 3 might need, above) in comparison to the others. No doubt this is due to this version of the wrist watch needing the extra juice to charge the 3G feature.

The main difference between the S2 3G and classic model was the lighter and thinner case, which was again, due to a more traditional and sporty feel. With fewer features than the S2 3G Gear, the S3 replaced functionality for (low) weight. The Gear 3G watch is also supported by GPS navigation and Bluetooth, which allowed you to stay connected while you are travelling and on the go. While conserving batter life is a good thing, being out of contact is not. Manually connecting to WiFi will become a pain after a while which is where the soft SIM functionality comes in handy.

By all accounts, the Gear 2 trial was a bit of a flop with customers. It received some press coverage at the time of release but ultimately went nowhere in terms of sales. he trial did garner results, however, which could be used by phone companies and Samsung to improve their understanding of an eSIM deployment at a larger scale. Most in the industry expect Samsung’s 2018 line up to support eSIMs, too.


September is the hot favourite for release of the 2017 iPhone

We don’t have long to wait to be sure about the inclusion of the eSIM in the Apple Watch. Apple has traditionally released its new iPhone models during the course of Northern hemisphere Autumns ( that’s Spring for us in Australia.) September is the first month in Spring and about the 20th of that month seems to be the most common estimate of this year’s release. That is pretty consistent with the release of botht the the iPhone 7 and the iPhone 7 Plus. which were released in the September 2016.

There could be a fly in the ointment this year, however. Multiple sources, including 9-5 Mac suggest that supply shortages, probably OLED screen delays, could push the launch of the iPhone 8 back this time. Brian Huh, an analyst at IHS Markit concurs. He says that it is Samsung which is causing part of the delay because it cannot keep up with the anticipated scheduled delivery of Apple’s new screens. The displays are touted to come complete with home buttons and Touch ID – a new level of complexity in manufacture. And it’s not just them. Deutsche Bank is a reputable source for Apple news and their analysts are backing a 2018 release for the new Apple device. Similarly, KGI Securities echoes Deutsche bank’s doubts, suggesting that production difficulties are to blame for a release that might come “several months” after the expected original release date. Ming-Chi Kuo, an analyst at KGI Securities, says that the (rumored) 3D camera system Apple is proposing, is taking longer to develop than expected and that might by one of the reasons for any delay.

There is no one view on the release impact of these supply shortages. Amongst those analysts who believe that there will be no delay or almost none is China’s Economic Daily News. It claims that iPhone 8 production is on schedule for release by October. BlueFin Research Partners have stated that as far as they know there is no indication that the iPhone 8 release will be delayed and may even be released earlier than expected.

The general impression of the iPhone 7 and 7 plus was that they weren’t innovative enough so potential owners are backed up for an upgrade. In fact, the 2016 release was a bit of an anticlimax for many. This year’s the 10th anniversary of the release of the iPhone. There is also rising competition from device manufacturers around the world, particularly cheaper, Android ‘equivalents’. Given that Apple will want to stave off mounting competition from these cheaper providers, it’s a fair assumption that the technical and design staff at Apple have been instructed to come up with something special. Wireless charging, a Touch ID sensor and an almost indestructible glass / poly-carbonate screen have all been touted.


Summing up our thoughts on the implementation of the new eSIM

After Apple’s rather disappointing new device release last year, the potential delay is the last thing that fans want to hear. Unfortunately, the iPhone is its own worst enemy. The product is so singularly successful that any feature upgrade – for example, to a new screen – can cause a shortage of that component.

Everyone expects innovation in the next range of smart phones, the iPhone8, especially given recent years’ disappointments. The iPhone 8 may have dual SIM capacity for those phones in international geographies in which customers want it. There is a great deal of very intelligent speculation, too, that eSIM capability will be added. Apple are known for reinventing categories and the eSIM could make the iPhone even more versatile and lighter than standard SIM based phones are at the moment.

However, this year’s marking of the first decade of the iPhone means Apple have to come up with something special.  Perhaps thats why they’re including an eSIM, in their watch. It’s a seemingly innocuous technical change which could potentially introduce, in an innocuous way, a significant change for the way we all buy phones and plans.

Tying together what Apple have been doing elsewhere in the world is often difficult. They’re such a huge company that it files a lot of patents, some of which end up going nowhere. One view of their intent, as demonstrated through the examples on this page, is that Apple have trialed the eSIm in various formats and settled on a version which suits the need. There needs to be some way to transition the many millions of iPhone users around the world to the new SIM technology without confusing or alienating them. It is a formidable task but this watch could be the way to introduce the concept easily.

Ultimately, the eSIM will begin by stimulating a race to the bottom. Phone companies will be fighting it and delaying it at every turn they can precisely because of that. Apple need to find common ground not just with the iPhone 8 consumers they are trying to educate on this new facility but also the telcos who, together, sell millions of iPhones under contract, tied to their network. Apple Need to manage their relationship with the carriers, who are a useful channel for now. Like Google with Project Fi, it appears these Apple experiments may be a way to encourage innovation in the field without upsetting their partners.

So, our call is for an iPhone 8 with a dual SIM facility alongside the Apple Watch 3 with an embedded SIM. We believe iPhone 8 users will be able to choose either a physical SIM or an eSIM. In the iPhone 9 and beyond, the physical SIM will be phased out.

If there is a single note of caution in our approach, it’s Apple focus on the experience in their phones. Apple love end to end experiences and they will be paying close attention to the technological capability that the eSIM (or whatever version / naming they use of / for it) is implemented well. Apple’s entire differentiation has been around making their phones ‘just work’. Managed correctly, the user experience for the new eSIM solution could be the biggest change in telco since the launch of the iPhone 10 years ago. A lot of people buy the iPhone each year and testing the processes that will need to be changed on the full commercial release of their new iPhone 8 might be too risky.


Sources :

The iPhone is such a significant cash generator for Apple that many financial / investment companies follow the product’s development closely. Deutsche Bank, in particular are a consistently reliable source for Apple information : https://www.businessinsider.com.au/deutsche-bank-possibility-iphone-8-launching-2017-5?r=UK&IR=T

We have covered the eSIM, Apple SIM and ramifications of the new technology thoroughly, elsewhere on this blog : https://whatphone.com.au/sim-only-byo-plans/the-esim-and-what-it-means-to-you/what-will-esims-soft-sims-the-apple-sim-change-for-you/

The importance of Dual SIM phones in Asian markets is hard to overstate : https://www.cnet.com/au/news/why-you-want-a-dual-sim-phone/

There is already a lot in the news about the new Apple Watch and it’s eSIM inclusion. I found this a useful article : http://bgr.com/2017/08/16/apple-watch-3-lte-release-date-rumors/

9-5Mac cover the same story well : https://9to5mac.com/2017/08/16/kgi-apple-watch-lte-esim-phone/


Neil Aitken

Having worked in 3 countries for 4 telcos on both voice and data products, Neil is in a position to give you the inside track. Get beyond the marketing messages to the best plan for you.