The European Telecommunications Standards Institute (ETSI) has announced that they have decided on the next generation of Subscriber Identity Module (SIM) cards. The original iPhone (and many other phones) used mini-SIM cards. The iPad and iPhone 4 were among the first devices to use the much smaller micro-SIM standard. This new nano-SIM design will be 40% smaller than current iPhone micro-SIM cards, measuring 12.3 mm wide, 8.8 mm high, and 0.67 mm thick.
RIM's original design wasn't backwards-compatible, which was one of the main tenets of Apple's, but ETSI says that the next generation of SIM cards should play nice with older hardware. If it feels like we're pretty much skipping right over the micro-SIM standard, don't worry -- outside of Apple, manufacturers have taken a long, long time to adapt it, and no doubt it will take a year or two before manufacturers start pumping out phones in mass that support the new SIM standard. Plus there are service providers that will need to make the transition on their end.
Ultimately, a smaller SIM card means a smaller SIM card slot, which means more room for other smartphone internals. This is a consistent theme for Apple, who aggressively moved to the micro-SIM and pushed hard for the nano-SIM. Next generation phones like the iPhone 5 will almost certainly use LTE 4G networking chips, which still aren't as small and power efficient as 3G chips. Apple will need space, be it for more memory, processor cores, sensors, battery, or antennae. That's also the likely reason Apple may soon adopt a smaller dock connector port as well -- every millimeter matters.
Specifics on the new SIM standard will be published shortly, but until then we can be sure of one thing: the new card will be very, very tiny.