All About Unlocked Cell Phones

Perhaps you've heard of them - unlocked cell phones. But, if you're like me, you didn't know exactly what that term meant. The purpose of this hub is to familiarize people with the concept of unlocked phones and show them the benefits of buying an unlocked phone from a third party versus buying a new phone from your cellular service provider.

So, what makes a phone unlocked? Some cell phones on the market today are designed to use a Subscriber Identification (SIM) Card. A SIM Card is a microchip that is put in phones that is issued by cellular providers that activates a phone when it is placed in the phone. A phone that is locked will only recognize a SIM card from one specific provider. The lock is a software setting that does not allow the phone to recognize SIM cards that are programmed for other providers, thus keeping the phone "loyal" to one carrier.

Many carriers offer huge discounts on new phones, often even giving phones away for free to subscribers that renew 1 or 2 year contracts. Cell phone carriers argue that they have to subsidize the cost of those phones by locking them. The carrier wants to ensure that if you buy a phone from them, you will only use it on their network, and therefore continue to pay them every month.

While this practice makes business sense for cellular providers, it is not as convenient for consumers. If your cell phone dies or you lose it before your contract expires, you either have to pay full retail price for a new phone or pay a huge penalty to end your contract before it's expiration date. Or maybe you just want to upgrade to one of the used Blackberry cell phones before your contract expires. To do that you would have to pay full retail price at your cellular providers nearest store.

This area of the market is what third party vendors that sell unlocked cell phones are targeting. By offering phones that are not limited to one network, these third parties can offer the same phone to customers on 3 different networks, thus appealing to a fairly large market. Consumers get some benefits because unlocked phones can usually be found for cheaper prices through third party vendors than they would at their cell service provider.