Is the Unlocked iPhone For You?

If you haven’t already heard, Apple is now offering 16GB and 32GB unlocked iPhone 4 models through the Apple Store, but is an unlocked iPhone the device for you? First of all, “unlocked” doesn’t mean “jailbroken,” it only means the phone doesn’t come with a micro-SIM card married to a specific carrier, and that you don’t need a two-year contract to buy one. An unlocked device still requires you to receive software updates and purchase apps through Apple via iTunes. So if you’re looking for a jailbroken phone, you’re already barking up the wrong tree.

Unlocked iPhones really only benefit frequent international travelers by allowing them to avoid steep roaming charges. The new unlocked Apple devices don’t work on Verizon or Sprint at all, and are pretty much useless on T-Mobile since they don’t support its 3G download speeds. Meaning, you’re pretty much stuck with AT&T anyway, and with 16GB model selling for $649, and the 32GB model selling for $749, you’re better off buying the locked iPhone with two-year contract. According to Forbes, “Consumers would spend over $2,200 a year to use an unlocked 16-gigabyte iPhone 4 on AT&T’s cheapest wireless plan, as opposed to paying $1,750 for the same device on a contracted plan.”

Why does it benefit international travel? The same reason it’s limited in the U.S., the micro-SIM card. Buying a card with prepaid minutes from a local carrier in another country is a lot cheaper than paying international roaming charges. So if you travel a lot, then the unlocked iPhone might be a good investment, unlike a person who rarely or never leaves the country.

So why even sell the unlocked iPhone in the U.S.? One reason is international travelers are a huge market, and Apple wants to cash in on them. Another theory is that AT&T is trying to butter up the FCC for its T-Mobile merger, but that would mean AT&T was the one blocking unlocked iPhone sales in the U.S. in the first place. This is another reason why an unlocked iPhone may not be a good investment. If the AT&T/T-Mobile sale is approved, that would leave only on GSM carrier in the U.S. making the device really useless.

If you’re an international traveler who happens to be an Apple fan, or a person who doesn’t like commitment, and doesn’t mind paying a little extra cash for the freedom of choice (even though it isn’t much of a choice) then the unlocked iPhone model is probably a good fit for you.