While some people prefer the freedom of pay-as-you-go phones, there are still 75 percent of Americans who opt to go under contract with a cellular service provider. However, many subscribers often find that getting away from their phone companies can be harder than they thought, with networks imposing costly early termination fees for subscribers that try to leave before the contract is done, and locking phones so they can only be used on their network.
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Perhaps that's why many users prefer to purchase unlocked cell phones. For those who want to purchase phones that are not locked to a particular carrier, this document can help clear up the difference between the two types of these phones, namely, factory unlocked or unlocked. While many people may use these two terms interchangeably, there is a big difference. Before that, it's helpful to understand why phones have to be locked in the first place, and about the different wireless technologies used today. Despite the costs, many people still prefer unlocked cell phones over locked ones, because of the many benefits these phones offer. Unlocked phones are available direct from the carrier (at a premium price) or from electronics and cellular stores, but many go to eBay for some of the best prices on the Internet.
Reasons Phones are Locked
Having an unlocked mobile phone seems like a no-brainer for most people. Yet, carriers go through the trouble and expend additional resources just to ensure their phones don't get used on other networks, especially if that phone is a smartphone. One reason they lock phones is to install special software in the phones. These include special ringtones or logos, but also useful functions specific only to the carrier.
The main reason that phones are locked is to recoup losses from discounted phones. Many companies often lure new customers to sign up with their service using cheap phones as bait. These phones are often included in the plan without any markup or even at a loss, because they know that they can recover this cost as long as the customer remains loyal to the company for a certain period of time, usually two years. Carriers can make it difficult to keep the expensive phone and switch to another company by locking the phone, meaning that the phone only work when tied to their network. Additionally, manufacturers like Apple and Samsung keep these carriers happy by selling their factory locked phones at a premium, sometimes as much as 500 percent more than getting it with a contract.
Wireless Technology Basics
Before going into detail about unlocked phones, it would be best to learn about the two main technologies used by cell phones to access cellular networks, and how they are related to unlocked phones. These are GSM and CDMA.
GSM vs. CDMA
Mobile phones run on either a GSM (Global System for Mobile Communications) or CDMA (Code Division Multiple Access) system. CDMA phones have all the customer information installed on the phone by the mobile network service provider. A customer can take the phone home (or have it delivered to their doorstep), turn it on, and start using it. GSM phones, on the other hand, require a special plastic chip called a SIM (Subscriber Identity Module) card to verify the identity of the subscriber to the cellular network so he or she can use the phone. This chip can then be transferred to other GSM phones. A GSM phone can run almost anywhere in the world, and use any SIM card, provided it's not locked to one carrier.
Phone unlocking almost always refers to GSM phones. Most people who want to unlock phones want the freedom to switch SIM cards later on, and even to go back and forth whenever they please. It's not that CDMA phones aren't locked or can't be unlocked. However, it's much more troublesome and often involves having to ask the carrier for unlock codes. While many carriers do this for subscribers, switching the phone over to a new CDMA carrier is just as difficult and often not worth the effort.
Difference Between Factory Unlocked Phone and Unlocked Phone
A locked phone is tied to one specific carrier and therefore can't be used with other wireless network providers. A factory unlocked phone and unlocked phone can both be used with a SIM card on any network. However, the main difference is that a factory unlocked phone has been unlocked by the carrier or retailer and an unlocked phone has been unlocked by a third party. Factory unlocked phones are shipped from the source and unlocked before being sold to the customer. For example, an Block White Court Heel TAOFFEN Women's Shoes 68nxwAXf that is bought from the Apple retail or online store factory unlocked. However, if it is taken from the Apple store as-is, it does not have working cellular capabilities. Instead, it functions as an iPod when hooked up to wireless internet. The buyer must go to a network carrier and set up service in order to make that iPhone function as a phone.
Unlocked phones, on the other hand, can have the carrier restriction removed with special software. While this may seem shady, unlocking a phone in the US is perfectly legal. Cellular carriers simply do not advertise this because they want you to stay with your plan, rather than to break contracts by switching to another carrier. There are different ways to unlock a phone, depending on the type of phone. These unlocked phones (also called software unlocked) can then be used with any SIM card on any network.
Benefits of an Unlocked Phone
Unlocking a phone makes it possible to leave a carrier at any time, although most service providers impose a hefty fee for those who leave in the middle of the contract, or they demand the phone be returned. For people who have locked phones and don't plan to change carriers, there are also other compelling reasons to remove the lock or purchase a factory unlocked phone, namely, to save on roaming charges, have the ability to modify the phone, use a phone model a carrier may not offer, or resell it at a higher value.
Save Costs on Roaming Charges Abroad
Using a cell phone abroad is expensive, and many people use unlocked GSM phones when they travel to avoid paying high roaming charges. By replacing the SIM card in a phone, a user can avoid the high roaming charges that otherwise accrue. A businessman going on a week-long trip to Europe or a backpacker setting off for four months in India can easily purchase a pay-as-you-go SIM as soon as he lands at the airport and start making cheap calls and send text messages to friends and colleagues in the country. This also means people living in other countries where a phone may not be available can purchase an unlocked phone and use it in their home countries. A new SIM card can be purchased at most large airports.
Most owners of locked phones cannot make any changes to their phone whenever they want. For example, locked Windows phone owners can only install applications from the Windows Phone Marketplace, which is region-specific. That means Windows phone owners in the US cannot purchase apps available only in Asia, Europe, or anywhere else in the world, and vice-versa (due to copyright or legal reasons). When a phone is unlocked or comes factory unlocked, the user can then make almost any modifications he or she wants, such as add any app, modify the software, or remove carrier-specific software. Note that this is still different from jail-breaking a phone, which entails removing all software confines and having complete control over apps and other features.
Use a Phone Model a Carrier Doesn't Offer
Manufacturers and carriers still try to control the mobile phone market. Some manufacturers have exclusive deals with certain carriers to distribute their latest models. For example, Samsung signs a contract with "Carrier A" to offer their latest Galaxy phone to subscribers. Therefore, other wireless service providers won't be able to obtain these phones to sell to their customers. If subscribers of "Carrier B" want to get their hands on those hot Samsung phones, they'll have to sign up with "Carrier A" or obtain an unlocked phone from Samsung or a third party.
Resell at a Higher Value
An unlocked phone has a higher resale value than a locked one. Aside from having all the benefits previously mentioned, the owner can sell the phone to any person on any network. For those who like to switch phones frequently, having an unlocked phone can help them sell it faster and for more money.
Having an unlocked phone makes it easier for subscribers to break ties with their cellular phone carrier. Most companies lock phones to prevent them from being used on other networks so they can add software and regain their losses from selling the phone cheap, but many phones today are available as factory unlocked or unlocked. It's important to note that these terms refer to GSM phones or phones that utilize a SIM card.
The main difference between a factory unlocked and an unlocked cell phone is that the former is unlocked by the carrier or retailer and the latter is unlocked by a third party (or the buyer himself) using a piece of software. Unlocked phones have many benefits to users, including, saving on international roaming costs, the ability to modify the phone, use a model not offered by the carrier, and resell the phone at a higher value. Unlocked phones are often more expensive than getting them with a contract, but those who want to find the best deals should go to eBay, as this site offers a wide range of phones at great prices. From there, users can find anything from an older, 16GB phone, to a brand-new 64GB iPhone 6 in "space gray" or "gold." There are so many options when it comes to unlocked phones, and almost every model and design can easily be found on eBay.