Indeed, most phones sold in the United States are locked into the carrier that sold them. Nearly all mobile phone providers discount the price of the handset in exchange for a fixed contract. But even some phones sold at full price without contracts remain locked.
But that has not stopped many from unlocking phones, either with the permission of the carrier or, as is more commonly the case, without it. Apple said that nearly one of every six iPhones sold in the United States was bought with the intention of unlocking it.
Almost all cell phones available today have a subscriber identity module (SIM) card in them. This is the small computer chip that communicates with your wireless provider and stores your phone settings and numbers. The SIM card is basically the hard-drive of your cell phone that lets it do all the cool things you depend on the phone for.
When you bought your cell phone from the service provider, they programmed, or locked, your phone’s identification number to the SIM card provided by their service. By doing this, they are able to send calls to your phone, compile your minutes, and keep track of your service. In theory, this is a good thing since it gives you the technology to make phone calls, retrieve voicemail, and send instant messages.
Another great thing about SIM cards is that you can switch it to another phone. If your old phone dies or you find a new phone you want to use, moving the SIM card to the new phone will allow you to access your phone book and settings while still using the same service provider. You won’t even need to notify the cell phone company of the change since they track your service through your SIM card, not the phone. This will only work, however, with an unlocked phone that isn’t already programmed to another service provider.
The downside of a locked phone is that the service provider makes it difficult to switch to a new company without buying a whole new phone. By locking your phone, the cell phone company has put up a pretty big roadblock preventing you from moving your phone and data to a new provider. When you sign up for new service, you usually have to purchase a new phone, reset it to your preferred settings, and re-enter all your contacts manually. Your old phone probably gets dumped in a drawer and is forgotten about since it’s now useless. This can be an expensive endeavor, especially if you bought a top-of-the-line phone from your last provider. It’s also inconvenient and maddening.
Another problem with locked phones from America is that they don’t work well in other countries, particularly Europe. Travelers often have to pay incredibly high fees to use their American phone in another country. In the past, the only way to get around this was to buy a cell phone contract in the country you’ll be visiting, but this usually isn’t cost-effective if the visit is short or if it’s a one-time event.
An unlocked phone can make these problems go away by working with any SIM card or service provider that you want.
Customers will pay a premium for the unlocked iPhone 4 compared to the subsidized price that carriers offer to customers willing to lock into long term contracts, but for some that premium may be worth it.