I have always been a huge fan of the iPhone. It won me over when I first watched Steve Jobs announce the amazing smart phone during one of his famous keynotes. I was even more impressed when I got my first iPhone and was able to do so much on it that a phone could never do before.
Despite my fandom for the iPhone there was a time when I was a bit jealous of owners of another smart phone. It all started when Google announced the Nexus One. There was’t any particular feature of the phone that made me jealous or want to buy one, but the process for purchasing a Nexus One was what I coveted.
At the time Google was selling their Nexus One phones online and without a contract. You could pick your phone, pick your carrier, and go. The iPhone was still only available to AT&T customers and only with a 2 year contract.
Google eventually ditched that method because of slow sales but it appears that Apple was also a bit jealous of that sales process. Earlier this week, they decided to stand up a bit to cell phone networks and start selling unlocked iPhones on GSM networks. The news was sure to make owners of “unlock your iPhone” websites and applications scream with horror.
Buying an Unlocked iPhone
Buying an Unlocked iPhone is as easy as the original Nexus One process. Simply open a web-browser to Apple’s online store and navigate to the iPhone sales page. Select the Unlocked iPhone model you’d like to purchase and complete the check-out process. Unlike Google’s original approach which only sold the Nexus One online, Apple is sure to sell their Unlocked iPhones at their retail locations.
How Much Will the Unlocked iPhone Cost?
When you purchase an iPhone connected to a 2 year contract you effectively spread the cost of the phone over those two years. The cell network selling you a plan wraps into the monthly service fee the majority of the price for the phone. The $199 you pay to start service and walk away with your iPhone from AT&T or Verizon is essentially a little less than 1/3 the total price of the phone.
When you buy an Unlocked iPhone without a 2 year contract you’ll be required to pay full retail price for the phone. For the 16gb iPhone that price is $649. While the initial price is higher, individuals who purchase an unlocked version of the iPhone usually end up paying less for the phone + their network fees over 2 years than those that buy with a two year contract. Of course, unlocked iPhone owners also have the ability to quickly switch from network to network as they choose.
The Future of Cell Phone Sales
Cell networks did everything they could to stop Google when they first started selling their phones unlocked. Google was a bit at their mercy because they had no retail locations to help push their phones to consumers and the online sales distribution method is still not equal to that of selling at retail stores. Google eventually backed down but you can be sure the company themselves also believe in selling phones directly to consumers without contracts.
Apple now is taking the lead in this initiative and hopefully other cell phone manufacturers will follow suit. Microsoft may even try this approach with some of their Windows 7 phones, especially given their recent deals with Nokia. Cutting out the cell networks from the picture will only benefit the consumer in the long run. The future looks bright with Unlocked cell phone purchases.