T-Mobile Debuts Legal Unlocked iPhones without Contracts

| About: Apple Inc. (AAPL)

By Carl Howe

Well, that German court injunction we noted yesterday appears to have had its effect. T-Mobile is now selling iPhones without a contract for €999 or about $1,478. But wait, there's even better news:

It will also allow those customers who bought an iPhone since Nov. 19 to unlock the device free of charge so it can be used with other SIM cards. However, that will not enable customers to make use of all the functions that the music-playing and Web-browsing device offers.

I get the last part; T-Mobile can't guarantee that the carrier for every SIM card has EDGE service, so it can't guarantee Web browsing. But music-playing? That seems a bizarre restriction, so bizarre, in fact, that I suspect it is a misprint or misquote. Music playing on the iPhone doesn't require any type of phone network access, so why would a different SIM card disable it? Hmmm. I wonder if iTunes will only recognize iPhones with approved carrier SIM cards in them..... That might explain the problem.

But the big news here is that for the first time since the iPhone launched, you'll be able to purchase an iPhone in Germany and legally unlock it from its carrier. We'll likely see a similar deal arrive next week in France because of French laws requiring carriers to sell unlocked versions of phones that are locked to carriers. Note that this doesn't mean you can modify the software on it -- that's a whole different thing. But it does mean you can move it from carrier to carrier and avoid roaming charges if you sign up with a local carrier.

All I can say is that I think it ironic that consumers can only buy locked phones in the "free market" US, while consumers can buy carrier-free phones in regulation-laden Europe.