Can Someone Explain This "Unlocked" Phone Thing to Me?

[wbensky]

Hey guys, sorry if this is in the wrong forum. I wasn't sure where else to put it.
So I've heard all these things about "unlocked" phones and I'm wonder what exactly it means. I know that Apple sells unlocked iPhones for around $600, so I assume it means something about reducing the monthly contract because it is so expensive. I've also heard that the Nexus 4 is also unlocked. If I'm (mildly) correct, what network do these phones run on? How much is it per month? Is there a data limit? Thanks.

 

[Nermal]

In a nutshell, an unlocked phone will work on any network. There are a few exceptions (for example, Verizon and Sprint won't activate a phone that they didn't sell) but in general you can switch providers at any time and don't need to sign a contract.

 

[viskon]

Unlocked phones work on all compatible networks. In the US, AT&T and Tmo would be the networks for unlocked phones. CDMA providers like Verizon or Sprint don't support unlocked phones. The main selling point for unlocked phones is the potential for a total lower overall cost. For example, if you signed a contract to pay $100 per month for the next two years, and picked a phone paying $199, your total contract cost would be $2599. On the other hand, if you picked up an unlocked phone for $600, you could go a prepaid service like Tmobile's $30 Walmart plan or Straight Talk's $45 plan on ATT. With the ST $45 plan, you would pay ST $1080 over 2 years, for a total cost of $1680 for two years. That is a saving of $900 over 2 years.

The other advantage of unlocked phones is that they will work worldwide on a compatible network. Just buy a SIM card from a local provider, pop it into your phone and you are golden. Great for international travellers. For me, one of the greatest allure of the Nexus line is that they are pentaband phones, meaning they will support any GSM network in the world.

 

[MRU]

Hey guys, sorry if this is in the wrong forum. I wasn't sure where else to put it.
So I've heard all these things about "unlocked" phones and I'm wonder what exactly it means. I know that Apple sells unlocked iPhones for around $600, so I assume it means something about reducing the monthly contract because it is so expensive. I've also heard that the Nexus 4 is also unlocked. If I'm (mildly) correct, what network do these phones run on? How much is it per month? Is there a data limit? Thanks.

An unlocked phone means it is not subsidised by a carrier, you are buying the hardware outright from the manufacturer.

Because phones are heavily subsidised by the carriers they tend to 'lock' the phone to that network, in order to re-coup the cost of the handset from the users tariff / bill.

An iPhone 5 doesn't really cost $199. That is the subsidised price by the carrier.

Whereas it costs $679 unlocked because there is no subsidy reducing the price to the consumer on initial purchase.


An unlocked phone therefore can be used with any plan on any carrier because it is free from constraints of the carrier.

 

[walie]

An unlocked phone means it is not subsidised by a carrier, you are buying the hardware outright from the manufacturer.

Because phones are heavily subsidised by the carriers they tend to 'lock' the phone to that network, in order to re-coup the cost of the handset from the users tariff / bill.

An iPhone 5 doesn't really cost $199. That is the subsidised price by the carrier.

Whereas it costs $679 unlocked because there is no subsidy reducing the price to the consumer on initial purchase.


An unlocked phone therefore can be used with any plan on any carrier because it is free from constraints of the carrier.

Not really true. Up here in Canada you've been able to get the Galaxy Nexus on a subsidy if you sign a contract. And the phone is still unlocked.

 

[MRU]

Not really true. Up here in Canada you've been able to get the Galaxy Nexus on a subsidy if you sign a contract. And the phone is still unlocked.

That's because Google's Nexus phones are not allowed to be locked as google demands so.

But they are an exception to the case.

Otherwise everything I posted is very true.

 

[theluggage]

Whereas it costs $679 unlocked because there is no subsidy reducing the price to the consumer on initial purchase.

Of course, if you're jaded and cynical like me, you might look at the cost of phones c.f. other consumer electronics devices, and wonder if the retail prices of unlocked phones are somewhat inflated to allow the manufacturers to offer big discounts to the carriers...

Here in the UK, when I looked into it, the heavy-user, lots/unlimited data&voice contracts that offered a huge discount on the phone weren't too bad if you were going to use the allowances, but if you wanted a large/unlimited data plan with minimal voice calls it was well worth buying the phone outright and shopping around for carriers.

I regard voice calls as a last resort and I'm paying about £13/month for pseudo-unlimited data and 200 minutes on a 1-month rolling contract.

Of course, the comparison is nigh-on impossible - the carriers make darned sure that their SIM-only contracts have completely different permutations of allowances than their with-phone contracts.