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Unlocked iPhones in US For $649
Endoflow2010 writes "Apple on Tuesday started selling an unlocked version of its iPhone 4, starting at $649. A 16GB unlocked iPhone 4 will set you back $649, while a 32GB version is selling for $749. Both are available in black or white; the black will ship within one to three business days, while the white is available in three to five days, according to the Apple Web site. The benefit of an unlocked phone is that you are not locked into a two-year contract with a particular provider. But it also means that you don't get the subsidized pricing provided by someone like AT&T or Verizon. The same phones with a contract cost $199 and $299."
It's interesting actually.
Every iPhone4 is manufactured the same (I'm talking GSM ones, not counting the Verizon/CDMA ones). They're loaded with software and shipped out to Apple. Every serial number issued is recorded.
What happens when you buy an iPhone4 is this. For carrier sold phones, Apple records the serial numbers of every phone they ship out, and in their database it's marked as "Carrier locked". For phones sold at the Apple store, if you pay for a contract-free one, it's marked in the database as "unlocked", else if you buy it carrier locked/subsidized, it's marked as "carrier locked" as well. The baseband at this time only has the iMEI and nothing else.
Now, the next step is important, and it doesn't matter if it's done by the carrier in store or by you. The phone is plugged into the PC and it talks with iTunes. The phone queries the baseband and asks it what the carrier ID of the SIM that's inside is. It passes this information to iTunes along with its serial number, which contacts Apple and Apple looks into the database to see what phone it is.
If it's an unlocked phone, Apple ignores the carrier ID, and passes back a baseband configuration blob that basically keeps it unlocked. If it's a locked phone, it takes that carrier ID and produces a baseband configuration that locks the baseband to that carrier ID.
Note that the only time the phone knows it's locked is during the initial "Connect to iTunes" phase, which is why you must have a SIM inside for it (iTunes complains if there's no SIM). Subsequent times (during a restore, say), having a SIM inside it doesn't matter.
This also means that the carrier locking only happens during this period as well. You can buy a phone from AT&T, stick in say a Rogers SIM card, connect it to iTunes, and you'll have a phone locked to Rogers instead of AT&T.
These blobs are probably signed by Apple to ensure that replay attacks aren't possible, and are keyed to IMEI.
This may mean that right now, it's not possible to re-configure the baseband with a new blob. I expect iOS 5 to allow this capability though with a new baseband firmware. The use of iCloud would mean a user would purchase the unlock option, then restore their phone - iCloud backs up the data, the phone erases user data and restores itself to default, then the user set up begins while it fetches a new configuration blob. iCloud then restores the phone.
No.
"For many self-employed people some sort of cell phone is necessary. It wasn't true some time ago, but nowadays you often need to be able to answer the phone no matter where you are. It doesn't have to be an iPhone, but it does have to be signed up with a cell phone carrier. "
Yes, perhaps - but if necessary, it can be written off. And you don't need to get a cell phone with a contract, and it doesn't have to be an iPhone, so I don't think that line of reasoning applies.
"This means that, as a practical necessity, many people need to sign a contract"
No. Contract-free phones are available and cheap. This thread was about unlocked phones having little effect on what is paid for access, while increasing what is paid for the phone. Even further, I do believe there are contract-free Android smartphones.
"This means that the free market doesn't work"
What most free marketeers call a 'free market' is more like an unfettered market. They take an extremist's view. That is NOT my view, however. From what I have seen, the free market works best when there are limits and regulations. Let businesses duke it out, sure - but keep them in the ring. Keep them from using knives and guns or other items that may harm the audience. Keep the audience from doing the same and harming the competition.
The free market works. Unfettered markets don't.
For an unfettered market to work,all things must be luxuries (consumers must be free not to buy), all transactions must be perfectly reversible (poisoning the water the land or air for a quick buck - or killing workers - must be 'fixable' for the same price or less as the profit made), and all markets must be infinite (labor must always be free to go get another job, for example). Having no regulation means that businesses in the course of maximizing profit will minimize competition. And when competition is marginalized or eliminated, there will be no motivation to improve or keep a lid on price, ultimately leading to economic disaster.
Paranoia is a Survival Trait!