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Unlocked versus service contract phones

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Since I have not owned a cell phone in years I need advice to help me understand the pitfalls of the various offers.

I see that I can buy a "unlocked" phone for $400-500 or so, versus a much lower cost for phone plus year or more contract.

But what can I do with an unlocked phone? Can I take it and contract for phone service separately?

How do developers work with unlocked phones?

Bill - confused -

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Yes. Unlocked phone means the phone is not tied with a service provider[More..]. You are free to go to other service providers. Back in 2008, when T-mobile was offering Android phones on contract, we chose an unlocked phone because we did not have T-mobile in India. We then subscribed to a local service provider.

Development on an unlocked phone isn't any different from developing using a contract phone, IMO. However, if you are developing applications for a certain country or a service provider you should have some knowledge of the relevant domain.
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In the USA, more phones than not are locked to a carrier, which offers the actual phone at a substantial discount, but then ties you to a multi-year contract under terms that would make Don Corleone blush.

The US phone networks are primarily one of 2 types - GSM or CDMA. Sprint and Verizon are CDMA, AT&T and T-Mobile are GSM. The two aren't even remotely interchangeable. A CDMA phone simply won't work on GSM and vice versa. There are, of course, other vendors (and, even one other protocol, I think), that that's the majority.

GSM is the standard in much of the rest of the world, although the actual frequency bands in use may vary.

CDMA does have some advantages. The Sprint EVDO data network is one of the fastest (both advertised and measured) around. However, for maximum flexibility, GSM has one winning characteristic. CDMA phones have a hard-coded ID inside them. If you do like I did and buy a used phone off eBay, you call Sprint or Verizon and have them incorporate that ID into their network, thus activating the phone.

GSM phone, on the other hand, use a SIM chip. The SIM is a small chip that plugs into the phone and not only contains your subscriber ID, it also serves as storage for other items, such as your caller list. That means that changing phones is as easy as popping out the SIM and plugging it into a new phone.

If you're doing a lot of international travelling, the reverse is also true. Often, if you use a US provider on an overseas network, the rates will kill you. In such a case, it's often worthwhile to open an account with a country-local phone company, plug in their SIM, use it while you're in that country, then unplug it and plug in a new SIM for the next country. And, of course, plug in your original SIM when you return home.

So really there's 2 considerations. First, are you going to want the flexibility that SIMs give you? If you do, get a GSM phone, which means that you will also have to pick a GSM carrier. Secondly, how much do you love your carrier? If you are happy with a certain vendor and don't mind being locked in, you can buy a service contract phone and save a lot of money on the hardware.
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