The unlocked iPhone 5 is now available at Apple.com, but customers will have to pony up $649 to $849 for the privilege of going contract-free. The unlocked iPhone 5 only works on GSM networks, limiting the appeal for customers that rarely leave the United States, but opening up a world of possibilities for those who travel overseas regularly.
The base 16GB iPhone 5 typically sells for $199 so long as buyers sign two-year contracts with AT&T, Sprint or Verizon. Each of those carriers subsidize the iPhone 5 to the tune of $450. Mash those two figures together and you get Apple’s $649 asking price. The unlocked 32GB iPhone 5 costs $749 and the 64GB model is $849.
The unlocked iPhone 5 is scheduled to ship in one week, just like the carrier-locked models. Apple’s still promoting the subsidized pricing on its iPhone 5 sales page and only reveals the unlocked iPhone 5 pricing when visitors click on a link that reads “Or get iPhone unlocked and contract-free.”
The unlocked iPhone 5 is compatible with AT&T and T-Mobile in the United States, but is incompatible with Verizon and Sprint. The unlocked iPhone 5 will run on most foreign wireless networks since the majority run GSM technology.
So why would you bother paying $649 for the iPhone 5 instead of the $199 that Apple and its wireless partners advertise? Some users will save money in the long run by getting a cheap T-Mobile pre-paid plan. For example, T-Mobile’s $30 Monthly 4G plan offers 5GB of data, unlimited messaging and 100 minutes of calling. That’s half the price of AT&T’s cheapest iPhone 5-compatible plan, which includes 450 minutes, 300 MB of data and NO messaging.
Bringing an iPhone 5 overseas is another big reason to buy the unlocked version. AT&T and other U.S. carriers charge ridiculous fees to roam internationally and services are limited while roaming. For example, AT&T doesn’t allow customers to place calls from one foreign country to a second foreign country. Customers may only call people in the country they’re currently in or U.S. numbers.
Gifting is another reason some customers will buy the unlocked iPhone 5. Customers can’t buy iPhones for others at the subsidized rates unless the recipient is present and willing to sign up for a two-year contract on the spot. If you want to put an iPhone 5 under the Christmas tree without being responsible for the attached contract you’re going to want to buy an unlocked iPhone.
Apple is limiting customers to two unlocked iPhone 5 units per purchase in an attempt to limit resellers from gobbling them up and selling them overseas, where the iPhone 5 often sells for much more due to scarcity.
We expect to see the unlocked iPhone 5 at Apple retail stores in the coming days.