By Katie Marsal

Published: 01:40 PM EST (10:40 AM PST)

After carriers threatened to stop offering subsidies for the iPhone, Apple has reportedly abandoned its plans to create an embedded SIM card that would allow users to choose and switch carriers more easily.

According to The Telegraph, Apple has given up on its plans to bypass carriers. One source told the U.K. publication that Apple was "sent back to the drawing board with their tails between their legs."

While Apple has reportedly abandoned its plans for embedded SIM cards in the iPhone, it will allegedly push ahead with that technology for the iPad. The publication claimed that Apple could offer a new iPad with an integrated SIM card before Christmas, or early next year.

However, the report also incorrectly said that a "new version" of the iPad will be released within a few weeks, and will turn the orientation lock switch on the right side of the device into a mute switch. This change will not be done with a "new" device, but rather the forthcoming iOS 4.2 software update for existing first-generation iPads.

In October, it was reported that Apple was developing an open SIM card that would allow users to shop for mobile carriers directly from the Apple Store. The integrated card would allegedly allow iPhone buyers to activate their service without having to call or visit a mobile carrier.

In addition to allowing users to select a carrier right from their phone, a programmable integrated SIM would also enable users to travel the globe and initiate service without having to obtain a unique SIM card for each carrier in a different country.

But last week reports began to emerge that European carriers were threatening Apple that they would cut subsidies if a new iPhone with an embedded SIM card were released. Carriers accused Apple of trying to gain control of customers, essentially marginalizing the role carriers play with iPhone users.