To understand what an unlocked cell phoneis, it is important to first understand what a locked cell phone is. Alocked cell phone is a cell phone that can only be used with one cellular service provider. In contrast, an unlocked cell phone can be used with any cellular service provider.

When a cell phone is locked, it will only recognize a SIM (Subscriber Identification Module) card that is issued by the cellularservice provider which the cell phone is locked to (a SIM card is amicrochip that stores data and provides cellular service once insertedinto a cell phone). In regards to locked cell phones, a SIM card can only be transferred between cell phones that are issued by the same cellular service provider.

If a cell phoneis unlocked, it can recognize any SIM card, regardless of whichcellular service provider it was issued by. Using the previous exampleof the Apple iPhone, a locked iPhone will only work with an AT&TSIM card. However, if an iPhone is unlocked, it can be used with a SIMcard from any cellular service provider (such as T-Mobile).

Advantages of Unlocked Cell Phones

The most popular reason that people want an unlocked cell phone is that it increases their options for choosing a new cell phone.Continuing with the example of the Apple iPhone, when this phone wasreleased, it was obviously in very high demand. However, there weremany consumers who wanted to purchase the Apple iPhone but because theywere already tied into a contract with a cellular service providerother than AT&T, they did not want to pay an early termination feefor breaking their current contract or become locked into a newcontract with AT&T.

For consumers who wanted an Apple iPhone but did not want to beforced to take either of the actions described above, their best optionwas to purchase an unlocked Apple iPhone. By doing this, they couldtake the SIM card out of their existing cell phone, put it into theApple iPhone and keep their existing cellular service provider whilestill getting the new cell phone that they desired.

The other reason that people want an unlocked cell phone is to keeptheir existing cell phone when they switch to a new cellular serviceprovider. Because you can have your existing cell phone unlocked, ifyou have to switch to a new cellular service provider for any reason(such as your employer choosing to switch the cellular service providerof all the employees in your company), you can replace your old SIMcard with the SIM card issued by your new cellular service provider andmaintain your existing cell phone instead of settling for a phone thatyou don't like as much.

Downsides to Unlocked Cell Phones

The first downside to unlocked cell phones is that they only work with cellular service providers which run on a GSM(Global System for Mobile Communications) network. The reason is thatcellular service providers which run on a GSM network use SIM cards intheir cell phones, while cellular services providers which run on aCDMA network do not use SIM cards in their cell phones. Because SIMcards are necessary for a unlocked cell phone to function properly, itis simply not possible for cell phones issued byCDMA cellular serviceproviders to be unlocked. In the US, AT&T and T-Mobile each run onGSM networks, while Sprint and Verizon run on CDMA networks.

The second (and arguably most significant) downside to unlocked cellphones is their price tag. The reason that cellular service providerscan sell new, popular cell phones at low prices is because they lockyou into a two-year contract. By subsidizing the initial cost of a newcell phone, they can attract new customers and make a profit over thecourse of each customer's two-year contract. Therefore, while you maysee a new phone advertised for $99, when it is purchased without atwo-year contract, it may actually cost $300.

The final drawback to unlocked cell phones is that it may result inyou being unable to take advantage of certain features offered by acellular service provider. For example, many cellular service providersinstall exclusive software on the cell phones that they sell directlyto their customers, and if you purchase an unlocked cell phone, youwill not have access to this software on your cell phone.

Obtaining Unlocked Cell Phones

There are four methods for obtaining an unlocked cell phone. Thefirst method is purchasing a new unlocked cell phone. The easiest wayto purchase a new unlocked cell phone is on the Internet. There aremany different unlocked cell phonesthat are available from well-known websites like Amazon and eBay(before purchasing an unlocked cell phone from an eBay seller, take thetime to review and evaluate their transaction history). If you arehaving trouble finding the unlocked cell phone you want on these majorwebsites, a quick Google search of "cell phone name unlocked" shouldyield a retailer that sells the unlocked cell phone you want (as witheBay sellers, be sure to review the reputation of any retailer that youare not familiar with). Phone manufacturers may also sell unlocked cellphones directly through their website.

The other three methods involve unlocking an existing cell phone. Ifyou have completed the terms of your contract and you want to unlockyour cell phone, your cellular service provider may be willing to helpyou unlock your cell phone. If this option is not available, you canfind companies which will unlock your cell phone for a fee (ranginganywhere from $5 to $100). Finally, if you are technically savvy, youmay be able to search and find a free guide online for unlocking yourspecific cell phone.