iPhone 5 Unlocked: Is Freedom Worth $649?

By Sumit Passary | Dec 02, 2012 12:20 PM EST

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Apple launched the iPhone 5 in September this year and now the company is offering the unlocked version of smartphone without any contract with a starting price tag of $649 on Apple's Web store.

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Usually, most countries get unlocked smartphones from the time they are released, but consumers in the U.S. have to wait until the company announces the unlocked version.

The unlocked iPhone 5 costs $649, $749, or $849 for the 16GB, 32GB, and 64GB models, respectively in the U.S. Users can buy the handset in either black or white colors.

"We believe the iPhone 5 has finally reached a point where consumers can walk into an Apple Store and walk out with a phone," reported Gene Munster, an analyst at Piper Jaffray (via CNet).

Apple was previously offering the iPhone 5 tethered to the official carriers AT&T, Sprint, and Verizon in the U.S. The unlocked iPhone 5 is only available on GSM networks, which means that subscribers on AT&T and T-Mobile can use the unlocked version; however, Sprint and Verizon users will not be able to use the unlocked version of the smartphone.

Currently, major U.S. carriers are offering the iPhone 5 with a starting price of $199 on a two-year contract. So what is the benefit of spending over three times on an unlocked version? The answer is freedom to the users.

"The unlocked iPhone includes all the features of iPhone but without a wireless contract commitment. You can activate and use iPhone on the supported GSM wireless network of your choice, such as AT&T in the United States," noted Apple's web store.

A two-year contract means that the consumer will have to pay the upfront $199 charge and minimum monthly fees which is currently $70 per month for voice, text, and data packages on major carriers. This adds up to around $1,700 in carrier fees over two years.

If a user gets the iPhone without any contract then the user also has the option to buy a month-to-month plan which may turn out cheaper.  

Besides the freedom from lengthy contract, international travelers can take advantage of the unlocked handsets, which can be used on GSM-based networks worldwide.

Moreover, if a user does not have any contract then the option to upgrade to the next iPhone, expected within 12 months, will be much easier.

Do you own an iPhone 5? Would you prefer the unlocked version of the smartphone?

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