MGMT 569 - International Operations: Apple's e-SIM Innovation Report

This report examines Apple's radical innovation of the eSIM technology. It delves into the concept of eSIM, its current interest, and the controversies surrounding its introduction, such as potential disruption to wireless service providers. The report provides a critical assessment of the innovation, highlighting Apple's competitive advantages, the importance of research and development, and the benefits for various stakeholders. It further analyzes the relationship between creativity, innovation, and design, as exemplified by the eSIM implementation in iPhones. The report also explores the design activity process of the eSIM in iPhones, and concludes by recommending potential collaborations. The report references several academic sources to support its analysis.

Running head: RADICAL INNVATION IN APPLE
1
Radical Innovation of e-SIM in Apple
Ekta Katihar
Royal Roads University
Author Note:
This paper was prepared for MGMT 569International Operations and Supply Chain
Management, taught by Krupal Patel, due on April 17, 2019.

RADICAL INNOVATION IN APPLE 2
Table of Contents
Introduction
eSIM Controversies
Critical Assessment of eSIM
References

RADICAL INNOVATION IN APPLE 3
Radical Innovation of e-SIM in Apple
Introduction
This assignment will discuss the product and service innovation technique used by Apple
Inc. while introducing e-SIM in the market recently. The concept of electronic SIM card is
completely new in the information and communication technology market which is already
dominated by Apple Inc. The innovation which Apple has brought by introducing e-SIM belongs
to the radical innovation category. The innovation of e-SIM in the iPhones required completely
new architectural knowledge, which is the essence of radical innovation.
Explanation of the current interest or controversial nature of the topic:
The new innovative product of electronic SIM or e-SIM which Apple has launched in late
2018 has emerged as an innovation of both current interests as well as controversies. The new
product e-sim would enable the consumers to buy new mobile connections without having to
change the sim cards in their respective smart phones (Jaffe, 2018). This new feature could
drastically reduce the high international mobile roaming charges (Cohen, 2018) as it would be
easier to add a local plan to the phone. Krause (2016) mentions that this innovation has created a
controversy among the established wireless service providers as consumers would be able to
switch their wireless service providers frequently. e-SIM will seriously disrupt the existing
players in the mobile industry as customers will no longer have to visit the wireless firm’s retail
store to sign up for the service and where a salesperson then inserts a tiny SIM card into a phone
(Krause, 2016). This will change the landscape for the mobile operators who strive to retain
customers and would also change the way the SIM cards are fundamentally used.

RADICAL INNOVATION IN APPLE 4
Critical Assessment of eSIM
A critical assessment of the radical innovation of e-SIM, which Apple has introduced,
reveals that leading companies are able to affect the entire industry by their own strategies. I can
opine from my own experience that this power to virtually affect the entire industry by a single
innovative strategy actually shows competitive advantages which Apple enjoys over its
competitors. The creativity from idea generation to product design is a process, which requires
immense research and development (Fig.1). eSIM is a result of creative thinking of Apple to
keep its product light, which enabled designing iPhone without SIM .As the mobile design
requires the data exchange over the network user’s location and bandwidth available should be
considered among other issues in the design process (Ocampo,Boggio,Munch and Palladino,
2003, p. 1127).
Creativity Innovation Design Products and Services
To make device Integrated SIM No physical SIM e-SIM in iPhone
Lighter and sleek chip
Fig.1 The relationship between creativity, innovation and design
This intense research and development requires immense investment in technology,
which in turn attracts huge capital generation. However, this nascent stage of eSIM makes slow
progress in performance, as it is the early stage of lifecycle on S Curve. The two reasons for slow
progress are completely new technology along with certain basic but important bottlenecks
which has to overcome (Sood and Tellis, 2005, p.153).I can point out from my own experience
the brand value that Apple enjoys, will generate the immense capital through this innovation.
Moreover, the huge revenue, which Apple Inc. generates by sale of products, enables it to give
high returns on investment to equity shareholders, which help to attract more capital.

RADICAL INNOVATION IN APPLE 5
Adoption of eSIM brings advantages to various stakeholders in the industry. Apple has
transformed the entire mobile industry by transforming its iPhone (Fig.2).Carlgren,Rauth and
Elmquist (2016) point out that concept of design makes ideas useful (p.40). This statement can
be exemplified in terms of eSIM because this factor would enable the Apple Inc. to attract new
consumers, thus generating higher revenue for Apple (Slack, N. and Brandon-Jones 2018).
Fig. 2The design activity process of the e-SIM in IPhone
Recommendation
The outcome of these competitive advantages is that the company is able to enter into
collaboration with companies from different industries. For example, in terms of the eSIM
innovation, it can be inferred that Apple collaborated with leading mobile communication
services providing companies, which however is not stated clearly. It's evident in the near future
that eSIM might outgrow the existing SIM cards which would help in reduction of plastic from
which the SIM cards are made that will help in reducing the environmental burden to an extent.
Transformed resources
 iPhone
 Customers
 Network
services
 Information
Transforming
resources
 Design and
technical staff
 Mobile
operators
Input
The product/service
design innovation
process Output
Value added for
customers
 eSIM

RADICAL INNOVATION IN APPLE 6
References
Carlgren, L., Rauth, I., & Elmquist, M. (2016). Framing design thinking: The concept in idea and
enactment. Creativity and Innovation Management, 25(1), 38-57.
doi:10.1111/caim.12153
Cohen, A. (2018). Will eSIM cards relieve roaming charges? Business Travel News, 35(15), 35.
Retrieved from https://ezproxy.royalroads.ca/login?url=https://search-proquest-
com.ezproxy.royalroads.ca/docview/2131573873?accountid=8056
Jaffe, J. (December 7, 2018). Dual- SIM and e-SIM on Apple’s 2018 iPhones: Everything you
need to know. Retrieved from https://www.cnet.com/how-to/dual-sim-and-esim-on-
apples-2018-iphones-everything-you-need-to-know/
Krause, R. (April 8, 2016). Will Apple e-SIM Hurt Wireless Firms? Software SIM version near,
easing process of switching carriers. Investor's Business Daily, Retrieved from
http://www-lexisnexis-com.ezproxy.royalroads.ca/lnacui2api/results/docview/
docview.do?
docLinkInd=true&risb=21_T28648164981&format=GNBFI&sort=RELEVANCE&start
DocNo=1&resultsUrlKey=29_T28648164985&cisb=22_T28648164984&treeMax=true
&treeWidth=0&csi=8204&docNo=3
Support.apple.com. (2019). Support.apple.com. [online] Available at:
https://support.apple.com/en-in/HT209044 [Accessed 16 Apr. 2019].
Peer reviewed:
Li, Y., Wang, J., Li, X., & Zhao, W. (2007). Design creativity in product innovation. The
international journal of advanced manufacturing technology, 33(3-4), 213-222.

RADICAL INNOVATION IN APPLE 7
Ocampo, A., Boggio, D., Munch, J., & Palladino, G. (2003). Toward a reference process for
developing wireless internet services. Ieee Transactions on Software
Engineering, 29(12). doi:10.1109/TSE.2003.1265526
Slack, N., & Brandon-Jones, A. (2018). Operations and process management: principles and
practice for strategic impact. Pearson UK.
Sood, A., & Tellis, G. (2005). Technological evolution and radical innovation. Journal of
Marketing, 69(3), 152-174. doi:10.1509/jmkg.69.3.152.66361