I friend of mine works at an AT&T store here, and he was telling me that there have been unconfirmed rumors that the SIM card will be "sealed" in the iPhones...forcing them to work like programmable ESNs do on CDMA networks. This would have two MAJOR drawbacks if true:

1. The SIMs (according to my friend) cannot be reused or assigned to another customer. Therefore, once activated the phone could never be transferred to another user (it would only work as a iPod).

2. Any existing Cingular/AT&T user would have to ditch their current SIM and be re-assigned to the new SIM inside the iPhone. This means if you wanted to go to the beach an leave your $600 iPhone at home you wouldn't be able to pop out the SIM and put it into a "beater phone" (something I do quite frequently with my Treo and a RAZR).

Both my friend and one of his co-workers said that if this turns out to be true its going to be a HUGE problem and something Apple and AT&T would have to change in any future generations. I find it hard to believe they would do something that stupid, but in looking at the pictures of the iPhone online I cannot see any discernable SIM slot (nor have I found any documentation describing one).

Anyone have any insight into this?

Craig