Apple begins selling unlocked iPhone 5 in the US, starting from $649
It's that special time of the year... that is, when Apple decides to unfetter the iPhone for US shoppers. The Cupertino crew has quietly started selling the iPhone 5 in an unlocked, off-contract form that will work on GSM …
Context & Ripple Effects
Apple's US iPhone business has run almost entirely through carrier subsidies since the original launch, but the company has been testing direct, full-price sales abroad for years — it began selling the iPhone 4 unlocked in Canada back in 2010. The quiet addition of an unlocked, off-contract GSM iPhone 5 at $649 extends that playbook to American shoppers for the first time this generation.
The timing matters: the iPhone 5 launched in September on US carriers, with some regional carriers offering discounts to win subscribers, and Kantar Worldpanel reported this week that Apple has climbed back to the top of US smartphone sales on the strength of the device. Selling unlocked lets Apple capture the full $649 margin and serve buyers the carriers don't reach.
First-order effects
- US buyers can now purchase a contract-free GSM iPhone 5 directly from Apple at $649, usable on any compatible GSM network instead of being tied to a two-year carrier agreement.
- Carriers lose their lock-in lever on this segment: customers who pay full price can switch networks freely, so the subsidy-and-contract bundle stops being the only way to buy an iPhone in the US.
Second-order effects
- Regional and discounting carriers, which competed on subsidized handset pricing at the September launch, must now differentiate on plan cost and coverage rather than device deals for off-contract buyers.
- A full-price US iPhone creates a liquid resale and gifting market — devices bought unlocked hold transferable value across carriers, pressuring the trade-in economics carriers use to justify contracts.
Third-order effects
- If Apple repeats the unlocked offering each generation — as its Canadian precedent suggests — the two-year contract could stop being the default US smartphone purchase path, shifting device choice ahead of carrier choice.
- Widespread pickup across eight outlets signals the market reads this as a policy shift, not a one-off; sustained unlocked availability would push the industry toward separating hardware pricing from service pricing.
The trend: Apple is normalizing unlocked, off-contract iPhone sales in the US, gradually decoupling the device purchase from the carrier contract that has defined the market.