The Different About Apple’s Newest Phone

Apple's Newest Phone

Would you pay $749 for an iPhone 4?

Apple is betting that enough consumers will think that the flexibility and freedom of its newest product — an unlocked (and substantially more expensive) version of its best-selling phone — is worth it and on Tuesday began selling it through the Apple store.

The units, which are available in either white or black and cost $649 for the 16GB model and $749 for 32GB model.

What is an unlocked iPhone 4?

An unlocked iPhone 4 is a GSM-compatible iPhone 4 that is not contractually tied to any specific wireless carrier and can be used on any compatible GSM network. (Click here for more about GSM.)

Unlocking is not the same as jailbreaking

An iPhone has been “jailbroken” when its operating system software has been altered to allow it to run applications that aren’t necessarily approved by Apple or purchased through the Apple App Store.

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How is this different from a normal iPhone 4?

Up to now, iPhones have been locked to either Verizon or AT&T, making devices with service plans from those carriers the only iPhones sold in the U.S.

The only option for these customers using their iPhones outside of the U.S. was to sign up for roaming plans, which could quickly get expensive. An unlocked iPhone 4, however, allows a user to purchase an inexpensive local carrier’s micro-SIM card and service plan.

Within the U.S., customers can sign up for plans with either AT&T or T-Mobile, although the unlocked iPhone 4 is not compatible with T-Mobile’s 3G network and data transmission on the company’s EDGE network will be slower.

Customers interested in using an unlocked iPhone 4 on T-Mobile’s network should note that T-Mobile does not sell micro-SIM cards. PCWorld reports that employees at T-Mobile stores will cut down a regular sized SIM card to micro-SIM specs.

Why is the unlocked iPhone 4 so much more expensive?

Wireless carriers like Verizon and AT&T subsidize the cost of these devices. The monthly service fees more than make up for the carriers’ extra cost.

What can I do with the unlocked iPhone 4 that I can’t do with a Verizon or AT&T iPhone 4?

Because the unlocked iPhone 4 is not subsidized by any carrier and not bound by a contract, you can cancel your wireless plan at any time without a fee. This is ideal for the frequent traveler who needs the flexibility to change wireless plans.

So is it worth it to buy an unlocked iPhone 4?

That really depends on how you’ll use it.

If you’re a frequent international traveler or split your time between the United States and a residence in another country and would like to use a local service plan there, then the unlocked iPhone 4 could be right for you.

But if you don’t leave the country much, it probably doesn’t make financial sense.

Why does this matter?

AT&T announced in March plans to buy T-Mobile for $39 billion. If regulators approve the purchase, there will be only one nationwide GSM carrier, so those who bought the unlocked iPhone 4 to get away from AT&T will be out of luck.

In Wired, Charlie Sorrell speculates that this might pave the way for pre-paid iPhone plans, a method of payment much more popular in Europe.

Finally, unlocked iPhones have been available in Canada and the U.K. for about a year and in the U.K., but in the United States, Apple’s wireless products have enjoyed tight relationships with wireless carriers, especially AT&T. This represents a move for Apple toward being carrier agnostic. Could the iPad be next?


GSM (Global System for Mobile communications) is available in 219 countries and is essentially the world-standard for wireless devices. According to the GSM Association, the industry’s trade group, “Terrestrial GSM networks now cover more than 80% of the world’s population.” Among the four national wireless carriers in the U.S., T-Mobile and AT&T are the only two that use GSMtechnology. Sprint and Verizon use CDMA technology, widely available throughout North America.)

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