Wednesday, June 15, 2011

Why Buy An Unlocked iPhone 4?

Unlocking iPhones to run on other networks has been big business in the past few years. Those technically proficient enough to unlock the prized phones have made a bunch of money not just selling the unlocked phones here in the states but also exporting them to other countries that have networks that will run them.

Apple has finally begun selling an unlocked version of the GSM iPhone 4 here in the US but those phone pack a hefty premium. The unlocked 16GB iPhone 4 is now available directly from Apple for $649, with the 32GB model going for $749. Sorry Verizon customers there is currently no option to buy an unlocked iPhone 4.

So the question is why would you want to buy one?

For years people were unlocking the AT&T phone and taking them to T-Mobile for a much cheaper alternative. Now with T-Mobile's service slowing, and the company blocking many of the options that made them cheaper it might not make as much sense as it did before. Then there is of course the take-over that is looming.

At this point paying a ton of money just for having your phone unlocked just doesn't seem as beneficial as it once was. There are some instance where it will make sense but for the most part it won't. For those wondering the main benefits would be:

  1. If you use your phone a lot for travel you still have the benefit of using your iPhone outside the US —GSM is essentially the rest of the world's standard when it comes to cell phones. So travelers will be able to use the device on other GSM networks anywhere else in the world. You'll need to pick up a micro-SIM card for whatever carrier you want but that's not all that hard.
  2. You can say good by to AT&T. You are paying full price for an unlocked version of the phone which means that you can upgrade without committing to a new contract with AT&T. 
  3. You still have the option of using T-Mobile. Even though their service isn't optimized to run the iPhone and in many cases it slower than AT&T you will still have the option and can probably save yourself enough money that it might work out in the long run.

So why is apple selling unlocked iPhones in the U.S.?

I've had a few people ask me this, and seen the question raised more than a few times so I thought I'd touch in on this one.

Apple does nothing without a reason, so the company has to have a reason here, although it's not saying what it is we can speculate to a few reasons.
  1. They want the iPhone to stay relevant until the new iPhone 5 comes out.
  2. They have too many in-stock and need to move them
  3. The have nothing to loose, AT&T no longer has exclusivity and they are looking at buying T-Mobile so why not give everyone a taste of the Kool-aid
  4. People can buy an iPhone 4 now without re-newing their AT&T contracts, which means they can then buy the new iPhone 5 later at a subsidized price.
  5. The export market: Because of exchange rates and taxes, Apple products are less expensive in the U.S. than in some other countries. An unlocked, 16GB iPhone 4 is £512 in the U.K.—that's $839 in U.S. dollars. Compared to that, $649 is a bargain. We could see an influx of Apple products being pushed out of the states for a decent profit!
Even though these phones are technically unlocked, they still only work on two US carriers so to be honest I think its has to be a marketing play. As I said Apple doesn't "just do" something without having a very good reason behind it. What it is we might not ever know!

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