HALF MOON BAY, Calif.--Apple (NASDAQ: AAPL) decided to put its Apple SIM card inside its new iPads because it didn't know which wireless carriers its customers would choose and because the company wanted to give its customers more choice, according to an Apple executive.
Greg Joswiak, Apple's vice president iPhone, iPod and iOS product marketing, said that the Apple SIM makes more sense for the iPad than for the iPhone because "most iPhones, by far, are sold through carriers." He said Apple sells more iPads through its own retail channels than it does iPhones.
"It's about the customer experience," he said during an appearance here at Re/code's Code/Mobile conference. "We ultimately don't know who you are going to use as the carrier, [and] we want to make it as easy as possible."
Joswiak said Apple has not discussed putting the Apple SIM into iPhones, but said that because of the way most customers buy an iPhone--through a carrier directly--the Apple SIM is not as well suited. "I don't think you're going to go to the Verizon store and say, 'Can you hook me up with AT&T?,'" he said.
The Apple SIM for the company's new iPad Air 2 and iPad mini 3 lets customers switch between different carriers' service plans on the tablets. However, there are numerous caveats to that premise.
AT&T Mobility (NYSE: T) has confirmed that if customers purchase an iPad with the Apple SIM and activate cellular service via AT&T, the Apple SIM card will be locked to AT&T's network and customers will need to purchase a new SIM to activate the device on another carrier. On the other hand, T-Mobile US (NYSE:TMUS) says it lets customers on the new iPads switch from its network to other networks and then come back to T-Mobile. Verizon Wireless (NYSE: VZ) does not support the Apple SIM but does provide wireless service for Apple's new tablets.
"Anything that's new, people want to stop and evaluate it," Joswiak said. Apple has indicated more carriers will likely support its Apple SIM in the future.
Joswiak said that Apple is selling new iPhone 6 and 6 Plus units as fast as it can make them. He declined to break out sales between the 4.7-inch iPhone 6 and the 5.5-inch iPhone 6 Plus, saying it was too early to tell and would vary by region. Speaking generally, he said consumers in Asia prefer larger screens while those in Europe favor smaller ones, with U.S. consumers somewhere in the middle.
In the second quarter of 2014, according to research firm IDC, smartphones running Google's (NASDAQ: GOOG) Android platform made up 84.7 percent of all smartphone shipments, while Apple's iOS phones made up 11.7 percent. Android generally garners a huge part of the smartphone market because of the dozens of OEMs making Android phones and because they are generally cheaper than iPhones in many markets. Apple is likely to see a boost in its market share in the second half of 2014 thanks to the new iPhones, but Joswiak said Apple is not worried about market share.
Joswiak said Apple has "no shortage of developers or customers," that Apple is rapidly approaching 1 billion iOS devices sold, and that customers have downloaded 85 billion apps from the App Store. "To us, it's about the experience," he said. Apple has a "naïve belief," he said, that "if we just make a better product or a better experience, there will be a market for it."
Indeed, Apple does not seem to be hurting; the company generated more than $100 billion of revenue from iPhones in its fiscal 2014 year, according to BTIG analyst Walter Piecyk.
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