Blog Post

Would an unlocked iPhone change your buying habits?

Apple (s aapl) may be on the verge of offering a factory-unlocked iPhone 4 for sale in the U.S., according to a new report Sunday (via Electronista). Apple already offers the iPhone 4 for sale unlocked in some other countries, so it should be easy for the company to do, but will it affect your buying decision?

Assuming Apple does what it has done in other countries where the iPhone 4 is unlocked to work with any carrier, unlocked versions will likely be sold exclusively through Apple itself, and will come with a fairly steep price tag, since it won’t come with any carrier subsidy. Without a contract, the iPhone 4 starts at $599 for the 16 GB version, and $699 for the 32 GB model. But, of course, you aren’t tied to any service commitment, and you’ll avoid the dreaded early termination fee, which can be as much as $325 for AT&T (s t) customers.

But there is a substantial catch. Unlike in other countries, an unlocked GSM iPhone in the U.S. doesn’t present many alternatives for those looking to play outside AT&T’s sandbox. You can’t use the device with Sprint’s (s s) network, or Verizon’s (s vz), since both are based on CDMA technology, and Apple isn’t planning on offering an unlocked CDMA device for sale in the U.S., according to the report. You can use it with T-Mobile, but you’ll be sacrificing 3G speeds for data traffic, and will instead have to settle on EDGE. Canadians have three choices of major carriers when it comes to 3G GSM service, and as do U.K. smartphone users, by comparison.

But carrier choice isn’t the only reason to opt for an unlocked iPhone. Having a factory-unlocked device makes the process of using it in international destinations easier by far (since you don’t have to resort to potentially risky and unsupported aftermarket unlock procedures), so frequent travellers will appreciate the convenience.

And even if you aren’t a globe-trotter, there are still big advantages to getting your phone factory unlocked, with resale value being possibly the biggest. The market for second-hand iOS devices is always hot, and you should be able to get a higher asking price by selling internationally to markets where the iPhone 4 might not be available, or might be available but prohibitively expensive, so long as you have a factory-unlocked version that buyers can easily use with their local provider.

According to Electronista, AT&T may be encouraging Apple to offer an unlocked version of the iPhone 4 as a way of countering Sprint’s objection to the proposed AT&T / T-Mobile merger. Sprint thinks the deal will give AT&T more control over exclusives with hardware providers, and an unlocked iPhone would make that seem like less of an issue without doing too much to hurt AT&T’s business. But whatever the reason, having an unlocked version available definitely isn’t a bad thing for shoppers.

Would you buy an unlocked version over a carrier-subsidized locked one?

20 Responses to “Would an unlocked iPhone change your buying habits?”

  1. I have seen people with unlocked Iphone 4’s. I am currently in Afghanistan and need to unlock my phone. What is the best way to do it?

  2. A different business strategy of Apple here is my opinion. The iphone 4s being made available on the AT and T / Verizon carriers will market the iphone 4s well since it is a GSM and not CDMA that only demands a fixed carrier in a life time. This part is not preferred by the people who travel across borders!

  3. I’d wait for the next phone if it was released unlocked. If the next phone is truly going to have a hybrid chipset and antenna, then I could pretty much choose any network I want.

  4. Everything depends on the price but I thinkI would buy. I travel a lot. I was considering an unlocked iPhone in Europe but it was too expensive and it did not have a world warranty. So I got a Nexus One. It was much cheaper (though still no world warranty).

    In the US, if they could keep the price near the old 1st generation unsubsidized prices (or at least keep the most up to date lower SSD model bellow $599) I would consider it. What would seal the deal are two things. 1, is a good implementation of the software sim (change carriers the moment I set foot in a country – use and change my existing post-paid accounts, I have two in two different countries, at will) and 2, world warranty. I had two iPhones die on me already (close to the end of warranty). Had I been in the wrong country, I would have been screwed.

    I am curious of the timing of this (if it is true). Is it connected to the back to school? We hear rumors of new stuff being included with the back to school promo (like iPad this year) and the iPhone comes up in discussion but it is discarded as it requires a contract and credit check and etc. This would change that. (Just speculating here. No need to take this for anything more than what it is worth.)

  5. I don’t live in the US and all cellular phones in this country have always been unlocked. Change the SIM, change the carrier. You can get the phone cheaper by entering into a contract with the carrier, but that doesn’t prevent changing the phone or the carrier at any time. It’s called freedom. The carriers don’t care what phone is being used as long as the contract is completed, if there is one.

  6. I would not buy an iPhone 4 unlocked. I would wait for the (rumored) iPhone 5 World phone, so as I could use it on any carrier in the US and Europe (I am assuming in addition to supporting CDMA on both Sprint and VZ it will also support T-Mobile’s 3g and not just AT&T’s, now that the two are merging). An unlocked AT&T iPhone 4 in the US has limited use, working only with AT&Ts 3g and no other carrier’s 3g service.
    What I would do, however, is demand that now that Apple is offering unlocked iPhones (if they do), that AT&T unlock my 2 year old 3gs which is out of contract, just like they will do for every other model and brand phone OTHER than Apple.

  7. Ted T.

    I would absolutely pay the full, unsubsidized price for a factory unlocked iPhone. I would stay with AT&T, but would be thrilled to be able to use local SIMs when traveling internationally.

    However, what I want is the NEW iPhone 5 when it comes out in September factory unlocked — not AT&T.

  8. barryotoole

    The possibility of Apple offering an unlocked iPhone in the US reveals the drawback of the proposed AT&T and T-Mobile merger: There will only be one national GSM carrier, and only T-Mo offers discounted voice and/or data plans, purchase independently where they don’t have to subsidize a handset. I doubt if AT&T will offer these plans post-merger.

    Although I’m not knowledgable about this, I think that LTE is a GSM based standard, so once should be able to use an unlocked 4G iPhone on Verizon as well.

    Nevertheless, I would seriously consider buying a factory-unlocked iPhone, as long as the resale price of a one-year old set is within a couple hundred dollars of my purchase price. I do make overseas trips on occasion, but the biggest advantage to me would be to not be locked in a two-year contract with a carrier, since a lot can change within a couple of years these days.

    • Ted T.


      It is a scandal that Apple/AT&T won’t unlock your 2+ year old out of contract iPhone. I still have my original iPhone at home and would love to have it unlocked, not to mention my current 3GS, whose contract expires in under 30 days.

  9. Not really. Other than the cheap, prepaid phones I get for my kids, all of my phones are factory unlocked except for one–the iPhone 3GS. I regret attempting an “aftermarket” unlock on it for a variety of reasons.

    Perhaps more disturbing than the software lock, though, is the fact Apple is trying to change the SIM standard to something no one else uses, or even eliminate the SIM card altogether. It won’t matter if the device is unlocked, you won’t be able to use anyone else’s SIM anyway. That alone is making me strongly consider switching to Android.

    • Ted T.

      Why do you think the carriers are fighting the SIM elimination tough and nail? The SIM locks benefit the carriers, not Apple. The purpose of the no-SIM iPhone isn’t to prevent you from changing carriers — quite the opposite, it is there to allow you to change carriers at will, without even having to visit one of their stores.

      Apple wants to sell more iPhones. Buyers prefer unlocked phones. Ergo, Apple prefers unlocked phone. The carriers detest unlocked phones because that forces them to compete rather than just having a captive customer base.

      • That “software SIM” would have to be supported by every carrier for it to be useful, otherwise it’s not really a “global” GSM device.

        Meanwhile, I like the ability to change phones from time to time, so for me, a standard hardware SIM is much more ideal.

  10. NoSimCity

    Apple has a Patent on Software SIM. If I could choose even between just 2 Carries on a month to month basis. Let carriers compete for my $

  11. M Henderson

    I had decided that I would not buy a new iPhone because my current one can’t be unlocked. I do a fair amount of international travel and use and old Treo overseas. If I could get an unlocked iPhone, then I would replace my current iPhone with another iPhone.

  12. RayRay

    I would definitely buy a factory unlocked iPhone. I currently use a Google NexusOne (which is factory unlocked) as I travel to Europe several times a year and like to use local SIM cards when I’m there. Popping in a local SIM is so easy, and MUCH less expensive than ATT’s roaming charges. I really want an iPhone, but will wait until they are available unlocked in the US (jailbreaking doesn’t appeal to me). In the meantime, my NexusOne will continue to serve me as a decent alternate.

  13. Regarding unlocked iPhones being released WED I believe it and here is why:

    I can see this happening. In april when I asked at the apple store in the us if I bought an unlocked iPhone in Europe and had is serviced here or replaced if the Lock would be kept. They did not even know apple sold unlocked iphones. Last Thur they were very knowledgeable.

  14. Linda Cameron

    I probably would buy a factory unlocked iPhone. Right now I have a jailbroken iPhone which I use with T-Mobile but it annoys me that it has to be jailbroken every time I want to update the software. I bought my iPhone from my brother for $200 when he upgraded his to the iPhone 4, so the price wasn’t bad. It has been a real gripe to me that other countries have the option of buying a factory unlocked iPhone but we can’t have one in this country. So much for the “free market” being so wonderful. It is not wonderful to the consumers.