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Apple Selling Unlocked iPhones in U.S. Online Apple Store

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Last week, PCMag.com editor-in-chief Lance Ulanoff weighed in on the question of whether Apple was about to release unlocked iPhones in the U.S. market, claiming authoritatively, “Apple won’t do it.” The next morning, Ulanoff admitted on Twitter that “I must eat my words,” as the company did exactly what he claimed it wouldn’t.

An unlocked iPhone, briefly, is a model that is not tied to a particular wireless carrier, but can be purchased without contract or commitment, and can be used with any compatible carrier of the owner’s choice. For the iPhone’s first few years, U.S. customers could purchase only iPhones tied to AT&T’s network. The iPhone models Apple added this year for use with Verizon Wireless can be used only on that carrier’s network. In fact, although AT&T and Verizon Wireless use incompatible technologies for their cellular networks, the GSM iPhone model designed for AT&T and most other carriers worldwide could work on the U.S. T-Mobile network if the phone weren’t locked, and the CDMA iPhone model designed for Verizon Wireless could work similarly on Sprint’s network in the United States.

Apple slipped four new models of unlocked iPhone into the online Apple Store: 16 GB and 32 GB models of the GSM iPhone 4, each in either black or white. Apple says the phones can be used “on the supported GSM wireless carrier of your choice, such as AT&T in the United States.” (While T-Mobile does use GSM technology, their 3G implementation uses a different frequency than AT&T’s, limiting the data throughput on an iPhone when used on their network.)

It’s important to note that an unlocked GSM iPhone still can’t be used on the Verizon Wireless network or other CDMA-based cellular network. (Some recent speculation has suggested that the Qualcomm chipset of Apple’s CDMA iPhone for Verizon Wireless could actually also support GSM carriers, and that an unlocked iPhone was coming that could be used on either type of network. I’m not surprised that didn’t happen.)

The biggest advantage we see for consumers is that an unlocked iPhone can be readily switched between carriers when its owner travels around the world. For GSM phones, all you need is a SIM card provided by your carrier of choice. (CDMA iPhones don’t use a SIM card, and no unlocked version is available at this time. In general, CDMA carriers in the United States have been reluctant to allow unlocked phones on their networks.) An unlocked iPhone should let consumers buy pay-as-you-go voice and data service for overseas visits, or save money by opting for cheaper plans from carriers who don’t need to make back the hundreds of dollars of outlay from subsidized phones.

As Ulanoff reasonably pointed out, there are good reasons for Apple to have avoided this move: It’s potentially more confusing for consumers, who mostly don’t want to have to shop for a carrier and a phone separately; and without the subsidy U.S. consumers are used to, the iPhone appears unattractively expensive. The 16 GB models cost $649, and the 32 GB models are $749, compared to the $199 and $299 prices for the equivalent models tied to AT&T and Verizon Wireless.

There’s enough demand for unlocked phones, though, for global travelers as well as consumers who prefer not to be tied down to particular carriers, that we figure Apple decided to take advantage of the end of its exclusivity arrangement with AT&T to make these phones available to those who decide they’re worth the unsubsidized price. Plus, it may cut down on jailbreaking, the prevalence of which Apple would undoubtedly prefer to reduce.

Check out the Take Control ebooks that expand on the topic in this article:

Decide which iPhone and accessories to buy, set everything up nicely (including transferring data from a computer), find your way around, and use the apps effectively. Updated in 2011 to discuss the Verizon iPhone! Also now covers buying, making, and using ringtones.

 

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Comments about Apple Selling Unlocked iPhones in U.S. Online Apple Store

There is another question here. Will it be possible to buy an iPhone and not activate the telephone part of it. In other words, to use it on WiFi (and gadgets like MiFi) only.
Mark H. Anbinder  An apple icon for a TidBITS Staffer 2011-06-14 12:59
That's an interesting question. Old iPhones can be used without cellular service as you describe, and these unlocked iPhones come without the need to commit to any carrier, but it's possible that activating the phone in iTunes will require that you've inserted a carrier SIM.
uhuznaa  2011-06-14 12:59
It will be interesting to see if AT&T will offer a "bring your own phone" plan. Over two years and with interest we're speaking here about $30 less each month and with AT&T still making the same money.
Adam Engst  An apple icon for a TidBITS Staffer 2011-06-14 13:06
Yes, I'd really like to see a pay-as-you-go plan for voice in particular, since we never come close to using the shared 450 minutes on our family plan. I'm less sure about pay-as-you-go data; I'd have to check my usage there.
uhuznaa  2011-06-14 13:24
I was very surprised to find that I never even reach the 500 MB limit I pay €7.99 a month for. At first I had 5 GB for €15, but it proved to be just a waste of money.
Mac X86  2011-06-14 15:05
I don't get what the big fuss is all about. Apple has ALWAYS offered unlocked iPhones. If you read the fine print at the bottom of the Apple Store iPhones page it quite clearly states:

"For those who are not qualified customers, are not eligible for an early upgrade, or wish to buy iPhone as a gift, the prices are $449 (8GB), $649 (16GB), or $749 (32GB)"

This has been in place since the release of the iPhone 4. Since the Apple reseller here in Fiji is not permitted to carry iPhones many of us have purchased unlocked iPhones out of the USA for use on our local GSM networks.

We're also quite used to paying full price for high-end phones as our carriers do not generally subsidise handset costs by pushing users into multi-year contracts.
Miguel Reznicek  2011-06-21 05:10
The unlocked iPhone is a boon to all foreigners who want an iPhone to use in their native countries and cannot get one because Apple does not sell them to the local carrier. In Bolivia for example, the iPhone has just as of June been availiable, and at a price near $1000 for the 16Gb model. So you see, it was not availiable before. A locked phone required a contract from a US carrier as well, resulting in yet another hurdle for the users of the "rest" of the world. This is a great move for Apple. I see it as a response to Android picking up sales.
My son gave me his iPhone 3G. I went to AT&T and they wouldn't unlock it. I went to the Apple store and they not only refused to unlock it, they told me that they would never unlock the phone even though it was off-contract. The sales person even questioned why any sane person would want an unlocked phone.

This was in Delaware at the Apple store. When I explained that I travel outside the US, he told me that I'd have to use AT&T international calling rates, etc., etc. I told him that's why I won't buy an iPhone myself. I'll keep my Nokia N-series phone with a much better camera, better reception, free GPS, WiFi, etc. and I bought it unlocked without a contract.

iPhones are unlocked outside the US, but it's nearly impossible to get them unlocked in the US. Even with the new iPhone 4 deal, it's at least $200 more than most comparable phones. My next phone will also be Nokia--N8, N9, C6, etc. I can use my son's iPhone as an iPod Touch instead.
Quentin North  2011-06-19 17:34
In Europe the iPhone has always been available unlocked.
a.rothschild463  An apple icon for a TidBITS Benefactor 2011-06-20 15:55
This is a godsend to those of us who live between Europe and the U.S. Now I can finally buy an iPhone and ditch my 5 year-old Treo 650. I use prepaid SIMs, TIM in Italy and T-Mobile in the U.S. and switch them in the air between Rome and New York. This is a big market, us travelers, and who's to say AT&T won't allow their contract customers to unlock their phones (which T-Mobile allows after 90 days of service) so they can use local SIMs in other countries. Bravo Apple for a smart and long overdue move.
Can't use iPhones for fast data on T-Mobile. iPhone doesn't have 1700 MHz frequency for 3G/4G, so you'll be stuck with slow data.
Sorry.
You can use your iPhone with PAYGO SIM from ATT or one of the other third parties that use the ATT network but have better rates.