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Tech Report: Will Verizon’s Unlocked iPhone Attract More Customers?

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The new iPhone 5 is displayed during an Apple special event at the Yerba Buena Center for the Arts on September 12, 2012 in San Francisco. (Justin Sullivan/Getty Images)

The new iPhone 5 is displayed during an Apple special event at the Yerba Buena Center for the Arts on September 12, 2012 in San Francisco. (Justin Sullivan/Getty Images)

LarryMagid01-228 Larry Magid
Larry Magid is a technology journalist and an Internet safe...
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SAN FRANCISCO (KCBS)— iPhones bought from Verizon Wireless are coming with a surprise feature. The phones are unlocked meaning they’ll work on other networks.

The move will likely get Verizon more customers, but there are some caveats. The Global System for Mobile Communications (GSM) chip in the iPhone 5 will work on carriers with the GSM technology. In the United States that’s AT&T and T-Mobile and it’s also most of the carriers in other countries. You go to Europe and Asia and chances are its GSM and GSM only, whereas in the U.S. they (at least Sprint and Verizon) use a different technology called CDMA.

What this means is you can the phone and get off a plane in Paris or London, go to a local cell phone carrier, buy a GSM chip, pop it into the phone and you’re good to go with local rates.

When I was in Germany last week I was calling the U.S. at four cents a minute using a German company’s SIM card instead of $3 a minute using a Sprint SIM card.

KCBS’ Tech Report:

The bad news is you shouldn’t expect to march over to AT&T or Sprint tomorrow and use your phone because you’re going to be locked into a two-year contract. Even though it’s technically possible you’d have to end up buying out your contract.

I think this will increase the re-sale value of phones and frankly that’s one more reason to consider at least getting a Verizon phone.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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