It’s common to encounter iPhones on the secondary market in locked and unlocked varieties. In this article, we’ll thoroughly examine the difference between locked and unlocked iPhones and the potential advantages of each. Read on to learn which is the best fit for your business.
What Are Unlocked iPhones?
Unlocked iPhones can be used with any carrier. All you need is a SIM card or software-based eSIM for the carrier and an active service plan. On the secondary market, an unlocked iPhone is often more expensive than a locked iPhone because it can be used with more carriers and has a larger market demand. For consumers, the higher cost of an unlocked iPhone is offset by the ability to shop around for the best service plan, which will typically result in a lower monthly bill than a locked device.
There are feature advantages to unlocked iPhones that may make them the ideal choice. 11/12/XS/XR iPhones have Dual SIM capability, meaning you can use two SIMs on the same phone. You might choose one service plan for domestic use and another for international travel. Alternatively, you could have one SIM for business use and one for personal use. To use these Dual SIM features, you’ll need an unlocked iPhone.
What Are Locked iPhones?
So, what does a locked phone mean? A locked iPhone has software code that limits its use to a specific carrier. While such a limitation might sound like an obvious disadvantage, there is one big reason some customers prefer locked devices — cost. Carriers offer payment plans on locked devices that allow you to spread out the cost of the phone over many months. They may also offer steep incentives in the form of discounts on a locked device. All this means that a locked iPhone may be the most accessible iPhone for many buyers.
On the secondary market, locked iPhones trade at a discount to locked devices. End users who already have a plan compatible with the locked device may find it to be a good deal. What you give up with a locked iPhone is flexibility — the buyer can’t comparison-shop for the cheapest plan to use with the device, which means they may end up with a higher monthly service bill.
Key Differences Between Locked and Unlocked iPhones
In a nutshell, what is the difference between locked and unlocked phones?
Locked iPhones are:
- Limited to one specific carrier.
- Often less expensive than an equivalent unlocked iPhone.
- Unable to use Dual SIM features.
Unlocked iPhones are:
- Usable with any carrier.
- Often more expensive than locked iPhones.
- Ready to use Dual SIM features.
Tips for Buying Locked vs. Unlocked iPhones
On the primary market, the choice between a locked or unlocked iPhone typically comes down to the buyer’s commitment to a particular carrier. If they are happy with the cost and level of service their carrier provides, they can take advantage of the carrier’s payment plan (and sometimes device discounts) to spread out the price of a new iPhone over many months. Spreading out the cost makes the phone itself more affordable, though their monthly service bill will likely be higher than if they shopped around for a service plan.
On the secondary market, phone resellers may have a preference for locked or unlocked devices based on observable demand differences in their local customer base. Locked and unlocked iPhones are generally available at multiple grade levels, including grades with defects that are easily fixed. If a reseller finds that unlocked iPhones sell in half the time of locked iPhones, the decision is easy. On the other hand, resellers may find that both types of iPhones sell well, and therefore choose to stock both devices to appeal to the widest customer base.
Another basic differentiator between locked and unlocked iPhones is the price: Locked devices trade at a discount to unlocked devices. Thus, a reseller will typically be able to purchase more locked iPhones than unlocked iPhones for a given amount of capital. However, because unlocked iPhones command higher prices, resellers will usually make more profit per sale on an unlocked iPhone. Ultimately, most resellers will decide between locked versus unlocked iPhones based on demand trends in their local market.