If you've always wished for a legally unlocked iPhone, your wish has come true. Apple is offering all of its iPhone models unlocked, ranging in price from $375 for an iPhone 3GS available now to $849 for a 64 GB version of its iPhone 4S, available in November.
The catch is the phones only work with GSM network carriers, and will not work with CDMA-based carriers such as Verizon Wireless or Sprint Nextel. That means, once again, AT&T has an advantage, albeit perhaps slight.
The unlocked iPhone includes all the features of iPhone but without a contract commitment," Apple said on its website. "You can activate and use it on the supported GSM wireless network of your choice, such as AT&T in the United States."
Ships Without Micro-SIM Card
The demand for an unlocked iPhone may not be in the millions, but it does serve a niche audience of travelers and others who have been clamoring for an legally unlocked iPhone for years.
"If you don't want a multiyear service contract or if you prefer to use a local carrier when traveling abroad, the unlocked iPhone is the best choice," Apple said on its website. "It arrives without a micro-SIM card, so you'll need an active micro-SIM card from any supported GSM carrier worldwide."
With the unlocked iPhone, users only have to insert the micro-SIM card into the slot of the device and turn it on by pressing and holding the on/off button for a few seconds, then follow the onscreen instructions to set it up.
Apple this week announced the new iPhone 4S, available for pre-order on the three largest U.S. wireless carriers -- AT&T, Verizon Wireless and Sprint Nextel. It will hit the shelves Oct. 14, and ranges as low as $199 for the 16 GB version with a two-year wireless contract commitment.
Unlocked versions of the iPhone 4S are priced at $649 for the 16 GB version, $749 for 32 GB and $849 for 64 GB. The new phones will not be available until an unspecified date in November. The iPhone 4 will be available unlocked for $549 and goes on sale Oct. 14.
Reducing Roaming Charges
"When you've got 85 percent of the planet running GSM and you travel a lot, you don't buy a CDMA phone. So this is a good thing and it's about the right price," said Michael Disabato, vice president of network and telecom at Gartner. "It gives the customer the ability to swap SIM cards when they go travel between countries and get rid of these serious roaming charges AT&T has."
An unlocked iPhone probably won't get replaced as often as a subsidized model. Disabato, for one, would look at the unlocked device as a two- or three-year investment. But that investment more than pays for itself when roaming charges are considered.
"Right now it's 50 cents a minute when I roam to Europe. I can run up a $1,100 voice phone bill in a heartbeat over there. Now, I can get a temporary number and let everyone know what it is when I travel," Disabato said. "Or I can route my desk phone to follow that number. That's the advantage of voice-over-IP. You can program your phone remotely."
What About the iPhone 5?
Disabato has been beating the unlocked iPhone drum for years. Now, that it is has finally been introduced, he's speculating that the iPhone 5 may have been delayed to wait for maturation of two evolving technologies, high-speed 4G long-term evolution (LTE) networks and near-field communication (NFC), which will allow for such things as "bump to pay" at cash registers in place of credit cards.
"Apple may have pulled the iPhone 5 back because they want to hold off to see what LTE is going to do. Also they want to see what NFC is going to do," Disabato said. "Putting out something they call a 4S is a simple way to get an upgrade out this year right in time for the Christmas rush but not have to worry about committing to these two technologies that are going to become important over the next couple of years."