The Australian Apple Watch 3 Will Have an eSIM Inside

apple esim

Apple, their Watch 3 and the eSIM saga

  • Apple have successfully pushed the entire phone industry to adopt a piece of technology.
  • The 2017 Apple Watch will feature an ’embedded’ SIM. (eSIM).
  • Both Apple and Samsung have been prototyping various versions of the eSIM for some time. (Detail below.)
  • 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 eSIM 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.

What is an eSIM?

An eSIM is an abbreviated version of “embedded” SIM. The eSIMs presence in the new Apple Watch means that there is no removable standard physical SIM chip in the product. 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) Like normal SIMs, eSIMs allow users to pick a phone company and plan directly from their device.

The eSIM has a number of advantages over conventional SIMs, which we explore below. For example : The eSIM in the new Apple Watch will mean that more than one phone number can be stored, like a dual SIM phone, but without the need for more electronic bulk.

Let’s see how these ideas tie together.

The Apple Watch and The eSIM

apple watch

The Australian Apple Watch (Version3) set for release in September 2017 is going to have an eSIM. The major difference with the eSIM, as opposed to a standard physical SIM, 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 to the eSIM which could have been used in the Apple Watch. They 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. Previous smart 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 plans, so no Dick Tracy watch talking with this particular device. It appears 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 than the Intel equivalent. That means your Apple Watch battery will last longer.
  • 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 an eSIM enabled direct internet connection.

There has been a lot of talk about eSIMs recently. 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 idea either to Apple or the broader industry. The concept has already undergone considerable research (see below). It has been in use since March 2016 in the 9.7-inch iPad Pro, Wi-Fi + Cellular model. That particular roll out was not a storming commercial success. Others, too, including Samsumg, have prototyped eSIM technology in watches before – as we cover below.

Apple have been the brains and the 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. The significance of this in our view 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.

When you think about it, the idea of going to the shops to buy a SIM is a little strange. 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. Further 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, after all.

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 hard.

What phone 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 which were designed specifically for the eSIM enabled Apple Watch, at the time of writing. Picking one is likely to be problematic for most. 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 downloading of 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 data bundle would be sufficient. As always, this is a rough guide and depends on your usage behaviour. 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. This amount of data should cost you $5 to $10 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.

  • Bigger phone companies are most likely to have plans for the eSIM available at the launch of the watch : 
    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 the provisioning infrastructure that can connect customers to their billing systems. (That’s a technical way of saying that small phone companies might not have eSIM plans for the Apple watch available at launch) The major ‘retail’ phone company brands you know, Telstra, Vodafone have been testing the eSIM for some time and will certainly have plans at launch.
  • Bigger phone companies 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. Users can then share their data allocation between phone and watch.

eSIMs - What you need to know

A bit of history : The first eSIM alternative Apple tried – The Apple SIM

The Apple SIM originally appeared back in late 2014. It’s what drew our attention to the whole area of the eSIM. It seems clear 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 the Apple SIM to two of it’s data only devices, the iPad Air 2 and iPad Mini 3. The new facility was different to the eSIM which will be used in the Apple Watch. 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 Apple SIM could connect it to ‘a selection’ (a small selection) of new phone companies, direct from settings. Unlike 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. The device had to be unlocked before people could do that and not every operator supported unlocking in every circumstance.

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. You can tell from the long winded explanation of the limits of that trial that it was far from a perfect customer experience.

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. 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.

Here’s how it would work in the new iPhone

new iPhone 8 feature new iphone

 

Why are Dual SIMS Popular in Parts of Asia?

Dual SIM smart phones are very popular in both India and China. Both are 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 eSIM

Apple may now be planning to change their tactics if news filtering through about patents they have applied for are followed through. In subsequent iPhone versions, Apple could use the same eSIM facility they are employing in this year’s watch . They could employ dual SIM or eSIM capability or both.

How we got here – the Samsung Gear S2 smart watch

Samsung, not just Apple are moving towards the integration of eSIMs 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 too were prototyping e-SIMs in real life scenarios. Finding the extra space to fit the SIM housing 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.

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.

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. 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 featured a 20 percent larger battery 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. The trial did garner results, however, which could be used by phone companies and Samsung to improve their understanding of a significant eSIM deployment at a larger scale. Most in the industry expect Samsung’s 2018 smartwatch and phone line up to support eSIMs, too.

Summing up our thoughts on the new eSIM in the Apple Watch

Everyone expects innovation in the next range of smart phones,. This year’s marking of the first decade of the iPhone means Apple have had to come up with something special.  Perhaps that’s why they’re including an eSIM, in their watch. It’s a seemingly innocuous technical change which could potentially introduce, 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 they file 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 (and others, including Samsung) have trailed the eSIM in various formats and settled on a version of the technology 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. 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. It is a formidable job but this eSIM watch could be the way to introduce a very new concept softly, both testing the processes which surround it and exposing people to the concept which, for many, will be new.

Partly as a result of the patents they’ve filed, partly as a result of the tests they’ve run and partly because they’re launching an eSIM in the watch this time, we think future iPhones may have dual SIM capacity. A duel SIM device simultaneously offering customers a chance to have a an eSIM phone and a phone which could work on a single hardware SIM would be in line with the patents and would offer a smooth, slow transitional period between the old and the new types of SIM.

So, our call is for an iPhone with a dual SIM facility alongside the Apple Watch 3. Either this year or in the future, we think iPhones will be duel SIM and shipped with an embedded SIM as one of the two SIMs. We believe iPhone 8 users will be able to choose either a physical SIM or an eSIM for a while, according to their preference. In the iPhone 9 and beyond, the physical SIM will be phased out.

 

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.