Apple sells unlocked iPhones in U.S. for first time

Analyst sees move as more evidence of pressure from Android

Apple today started selling unlocked iPhones in the U.S. for hundreds more than the usual subsidized price that AT&T and Verizon customers pay.

The move was a first for Apple in the U.S., although unlocked iPhones have been available in other markets, including Canada, France and the U.K.

In 2010, Apple began selling the iPhone 3GS at unsubsidized prices and without a contract, but still tied those phones to AT&T, at the time the exclusive U.S. carrier.

While rumors over the last few days had pegged a Wednesday on-sale date for the unlocked iPhone 4, Apple quietly posted prices on its site today.

Apple sells the unlocked iPhones at $649 and $749 for the 16GB and 32GB models, respectively. Both black and white iPhones are available.

Those prices are similar to what Apple charges AT&T and Verizon, which then sell the phones to their customers, said Ezra Gottheil, an analyst with Technology Business Research.

Unlocked iPhones will work on what Apple called "supported GMS carriers," referring to "Global System for Mobile Communications," the network standard used by AT&T, T-Mobile and some regional carriers in the U.S., and the likes of China Mobile in the People's Republic.

"Buying an unlocked iPhone 4 allows you to choose your own GSM carrier, change carriers at any time, and even use multiple carriers if you travel frequently," Apple said on its Web site.

But running an unlocked iPhone 4 on T-Mobile has drawbacks: Users won't be able to access that network at 3G speeds, but will be limited to the slower EDGE standard that was used by the 2007 first-generation iPhone, said Jack Gold, an analyst at J. Gold Associates.

Frequent travelers will be the biggest buyers of unlocked iPhone 4s, Gold said.

"Roaming charges can be a killer," he said, referring to the high-price-per-minute charges U.S. carriers levy when a customer is overseas. "I know people who have come back with bills of $2,000 or $3,000."

Unlocked iPhone 4 owners could purchase a pre-paid micro-SIM card from a carrier at their destination, for instance, and swap out the AT&T card, said Gold.

The iPhone 4 will probably be replaced by Apple as its primary smartphone in September, the month most analysts expect the company to roll out the next-generation model, dubbed "iPhone 5" by some and "iPhone 4S" by others.

That may be one of the reasons why Apple has begun selling unlocked iPhones now. "There's no reason not to get rid of the old stuff [before September]," said Gold.

Gold had another explanation as well.

"They understand they need to be more open, more flexible in the face of competition from Android," said Gold. "The competition is really heating up. Plus, they have nothing to lose by doing this."

The unlocked iPhone 4 can be purchased at Apple's online store, which currently shows a delay of one-to-three days between ordering and shipping for the black model, three-to-five days for the white iPhone.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer or subscribe to Gregg's RSS feed . His e-mail address is

Copyright © 2011 IDG Communications, Inc.

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