What is Factory Unlock
Advantages of a Factory Unlocked iPhone
The major advantage to factory-unlocked iPhone is the ability to transfer the service to another carrier without any problem. You can activate a factory unlocked GSM iPhone on any carrier simply by switching the SIM card. This allows you to use the phone on foreign carriers while traveling. Activating a CDMA iPhone is a bit more work — you have to use special software to change the phone’s network settings, but you can activate a CDMA iPhone on any carrier that accepts this.
Differences Between Locked and Unlocked iPhones
Before Apple started selling factory-unlocked iPhones, all of the iPhones sold in the United States were “locked to” their original carriers, whether the customer bought the phone under contract or paid full price. The phones are locked using a passcode called a master subsidy lock or service programming code. The code prevents the user from accessing the iPhone’s programming menu and using the phone on another carrier’s network. Factory-unlocked iPhones in Europe have always been available, but they only became available in the United States in 2011.
Why iPhones Are Normally Sold Locked
When the iPhone first launched in the United States, Apple and AT&T signed an exclusive contract. While it was still possible to activate the iPhone on another GSM carrier. When you buy a locked iPhone, the carrier sells the phone at a discounted price as an incentive for you to sign up for a lengthy contract. The company recoups the price it lost selling the iPhone at a discount over the life of the contract. Breaking the contract early can result in a penalty to the user in the form of a substantial cancellation fee.
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