The tech world is abuzz with the announcement that Apple is now selling unlocked iPhones in the US for the first time ever. An unlocked phone is sold without a contract, and is free to be used on any carrier on the same wireless frequency, all you need to do is swap out the SIM card. You could use an unlocked iPhone on AT&T or T-Mobile in the US, and on a variety of carriers should you be traveling elsewhere in the world.
The question is: should you buy an unlocked iPhone? Is it worth it? The price can be a little off-putting to your average US cell user, mostly because we are used to seeing contract-subsidized prices. $650 is a lot more money than $200, but there are some tradeoffs that you may need to take into account that could end up saving you money in the long run.
The first plus of buying an unlocked phone is that you are not tied down to a contract from your cell carrier. If you are unhappy with AT&T’s service, you are free to leave and bring your phone over to T-Mobile without worrying about an Early Termination Fee (ETF). ETFs can run hundreds of dollars depending on how long you have remaining on your contract, which is a lot of money to pay just to switch cell carriers. With an unlocked iPhone, however, you are free to change without any fear of a penalty.
Secondly, you might even be able to save money on your monthly bill depending on your carrier. While AT&T doesn’t give a monthly rate discount for phones purchased contract-free, T-Mobile has a plan that is cheaper than its usual plans that doesn’t include a phone subsidy. It’s not available online; you have to call and ask for it, but if you want to use an unlocked iPhone on T-Mobile, give the company a call and ask for the “Even More Plus” plans. The plans are significantly cheaper than its other plans, so you can save a lot on your monthly bill with an unlocked iPhone.
Finally, unlocked iPhones come with the bonus of being able to work all over the world. If you go on vacation to Europe, for instance, you won’t have to bother with expensive Europe roaming plans or buying a pay-as-you-go phone once you get there. Just bring your unlocked iPhone and buy a prepaid SIM card in any convenience store, swap it into your iPhone, and you will be good to go for much less money than if you had to buy a whole new phone just for your vacation.
If you have the money up front, buying an unlocked iPhone will probably end up saving you money in the long run, especially if you travel a lot or want to use T-Mobile instead of AT&T. In addition, the resale value of unlocked iPhones (especially official Apple unlocked iPhones) will be much higher, as they will work all over the world and people without official iPhone options in their country will be willing to pay more for an unlocked version. However, if you plan on sticking with AT&T and your iPhone for the duration of the two-year contract and don’t plan on traveling a significant amount, the usual contract-locked iPhone is probably still going to be the best choice for you.