There Is More To The Unlocked GSM iPhone 4.

John Gruber:

In other words, these unlocked iPhones sold in the U.S. aren’t for the U.S. — they’re for the parts of the world without carrier deals with Apple.

Yes, for those who live in an area that is not serviced by a carrier who has a deal with Apple, this new unlocked GSM iPhone 4 will solve the problem. But I think there’s more to it than that.

An unlocked GSM iPhone 4 is also a boon for travelers. Instead of paying your current locked-in GSM carrier outrageous international calling and data fees, you can simply purchase a prepaid micro-SIM card when you land. If a micro-SIM card is not for sale, just get a regular one and use a micro-SIM cutter.

Now an unlocked iPhone 4 has been available in Hong Kong so in that sense making it available in the US might not seem such a big deal. You can say that it only makes it easier for potential customers in the US to purchase an unlocked iPhone 4. But let’s try to figure out what might behind Apple’s decision to bring one out now, instead of before or later.

The first thing that comes to mind is that June has been, since 2007, the month when new iPhones are made available. Apple wanted to continue in that tradition. But I think that’s too simple.

Let’s assume Apple wants to accelerate the development cycle of the iPhone from once a year to twice a year. The biggest hindrance right now is the two-year carrier ball-and-chain. On the other hand, the iPad’s data plan is month-to-month. And so there is some indication that Apple will be bringing forth a new iPad in September. That would put the iPad development cycle at roughly once per six months. Apple can do this because current iPad users are not tied down and a new one will not cost them an additional early termination fee (ETF). On the other hand, if you cut your shackle too early for a new iPhone, the ETF is hefty.

If a new unlocked contract-free iPhone were available every six months that would put a lot of pressure on Apple’s competitors such as Samsung, HTC, and LG. I think this is exactly what Apple is already doing with the iPad.

Right now there are two iPhone versions based on baseband support: CDMA and GSM. In the very near future I would be surprised if Apple didn’t introduce an iPhone with a single baseband chipset that supports both. That would reduce the cost of manufacturing quite a bit improving profit margins, but just as importantly imagine an unlocked iPhone 4 that can connect to both CDMA and GSM networks.

With an unlocked GSM iPhone 4 the act of purchasing a physical micro-SIM could be replaced with the act of purchasing a non-physical one, an electronic SIM or e-SIM. Combine the idea of an e-SIM with a single baseband chipset that can support both CDMA and GSM networks and you’ve got the seeds to an iPhone that could overthrow the way things are done today.

With an e-SIM there is no need for a physical SIM card, instead an unlocked iPhone 4 user can simply tap on an app that shows all available signals and prices. Choose your carrier, plan, and Apple flashes your e-SIM. Now that’s convenience that Steve Jobs would probably appreciate, and carriers will hate.


What doesn’t make sense is that there are only two GSM carriers in the U.S., AT&T and T-Mobile, and they don’t use the same 3G band. So if you buy one of these to use on T-Mobile you’ll be stuck on EDGE, right?

Yup, you’d be stuck on EDGE if you wanted to use your unlocked iPhone 4 on T-Mobile. If my contract was over, I would purchase an unlocked iPhone 4. The only reason why I’m still with AT&T is because of the ETF.

AT&T’s network is terrible in my area. Crappy signals will cause the iPhone 4 to ratchet up its power and cause faster drainage of the battery. When that happens there’s more RF radiation. For those reasons I have decided to turn off 3G on my iPhone 4 and keep it at 2G (EDGE). And for the same crappy signal I would rather pay much less at T-Mobile.

Of course, this could be moot in the near future if T-Mobile gets swallowed up. T-Mobile offers some nifty packages like a prepaid $100 SIM card that gives you 1000 minutes valid for a full year. For those who don’t talk all that much on the phone but need one in case of emergencies that T-Mobile deal is unbeatable, nothing from AT&T comes close. I want T-Mobile to be independent.

The unlocked GSM iPhone 4 isn’t just another iPhone; it’s a signal to the rest of the cellular industry that things are about change, completely, again.

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