Why are 'unlocked' phones more expensive than locked ones?

Author's Note

Full disclosure: I use an Android phone. One of the reasons I do is because I was able to get it with the plan and carrier that I wanted and wasn't tied down to a contract. Whether I'll switch to an iPhone now that the unlocked versions are available is an open question, but I suspect that my girlfriend -- an Apple fan for the last couple of decades -- is going to make the jump. The cell phone business is a complicated one, with contract restrictions, subsidized (and often free) phones if you'll commit to a couple of years with the same carrier, and different voice and data speeds with Edge, 3G and 4G carrier technologies. At least Apple has made things a little simpler -- or have they made it more complicated? -- by allowing unlocked iPhones. They've given us new options and, while that may make things more confusing, it has to be a good thing.

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  • Aimonetti, Joe. "Unlocked iPhone 4S now working in some T-Mobile network pockets." CNET. (Oct. 1, 2012) http://reviews.cnet.com/8301-19512_7-57345343-233/unlocked-iphone-4s-now-working-in-some-t-mobile-network-pockets/
  • Apple Store. "Select an iPhone 4S." (Oct. 1, 2012) http://store.apple.com/us/browse/home/shop_iphone/family/iphone/iphone4s
  • Rawson, Chris. "Unlocked iPhone 4 available for $649 in US (Updated)." TUAW. (Oct. 1, 2012) http://www.tuaw.com/2011/06/14/rumor-starting-wednesday-unlocked-iphone-4-available-for-649/
  • Sadun, Erica. "Unlocked iPhone FAQ, including AT&T plan info (updated)." TUAW. (Oct. 1, 2012) http://www.tuaw.com/2011/06/14/unlocked-iphone-faq/