What are the advantages and disadvantages of unlocked phones?
So why buy a new unlocked phone? The main reason is flexibility. If you have your eye on a cool phone that your GSM carrier doesn't offer, such as the powerful palmOne Treo 650 or the Motorola special-edition RAZR V3, you can snap it up without worrying about service. You'll also have the flexibility to change GSM carriers without changing phones--a nice option if prices or coverage areas change. And enterprising users can add extra applications to their unlocked phones, ranging from the basics (new ringtones) to more complicated games, animations, web programs, and business tools. Not every application works with all carriers or phones, however, so you'll need to do some research first.
Some manufacturers even sell unlocked hybrid phones, which switch between a cellular network and high-speed Wi-Fi networks. The most sophisticated of these phones can switch between the two networks automatically, so you can sit in a coffee shop and download photos via Wi-Fi, receive a call, and then walk out the door and into cellular coverage without losing the signal. And finally, unlocked phones are terrific for overseas travel. Rather than relying on your current provider's spotty European or Asian coverage, you can buy a prepaid SIM card in Italy, for example, and simply pop it into your phone. In essence, unlocked phones put the control back in your hands rather than the carrier's.
That doesn't mean that unlocked phones are ideal for everyone, however, as carriers still have the advantage in many areas. For one, carriers typically pre-configure their locked phones with a number of functions--T-Mobile, for example, offers one-button access to such "t-zone" services as e-mail, movie listings, news, and more--while unlocked phones require manual programming to provide the same services. More frustratingly, some carriers install exclusive software on their handsets to enable specific features, an option that's often unavailable to the owner of an unbranded unlocked phone. T-Mobile's myFaves program, which lets you call up to five contacts with no limitation on free minutes, requires the use of a T-Mobile handset that supports the service, while many of AT&T's mobile broadband solutions require compatible AT&T handsets.
Perhaps the biggest drawback, however, is price. Because carriers offer steep discounts on locked phones to entice you into signing long-term service agreements, you often can get phones far below actual cost (sometimes even for free). An unlocked phone, by contrast, can cost several hundreds of dollars, and even the most basic phones are generally more expensive than you might expect when you aren't buying through a carrier.