The Real Reason Verizon Sells The iPhone 5 Factory Unlocked

The Real Reason Verizon Sells The iPhone 5 Factory Unlocked

It was recently revealed that Verizon sells the iPhone 5 factory unlocked out of the box. Not only can you use the Verizon iPhone 5 on another CDMA carrier, but the device will also work on non-LTE GSM networks, like AT&T. U.S. carriers will typically unlock off-contract iPhones for free, but Verizon is selling the iPhone 5 unlocked with a two-year contract as well.

Buying an iPhone 5 at the full, unsubsidized price on AT&T doesn’t guarantee that it will be unlocked, but AT&T will typically grant unlock requests for customers in good standing. The same goes for AT&T iPhone owners who have fulfilled the life of their two-year contract.

There’s been multiple theories suggested to explain why Verizon is behaving this way, but the real reason is much simpler than you would think.

First off, don’t think for a second that Verizon is selling the iPhone 5 unlocked for no additional charge because it wants to be nice. Some thought the reason was because Verizon actually had to sell unlocked thanks to the FCC. The coveted 700MHz block of LTE spectrum Verizon uses has some stipulations, namely that locked handsets cannot be sold by Verizon for use on its LTE network. As The Verge points out, the problem with that theory is that Verizon currently sells locked Android devices. It doesn’t look like Big Red really cares about potentially getting slapped on the wrist by the FCC.

So what’s in it for Verizon? Well, Verizon isn’t advertising the unlocked aspect of the iPhone 5, so there’s little commercial gain. It could be that Verizon just doesn’t care. My money is that it’s all about constructing a bigger narrative: good Verizon vs. bad AT&T. There are many savvy iPhone owners with grandfathered data on both carriers, and these customers are weighing the headlines to determine their next purchase. AT&T is blocking FaceTime over cellular, but Verizon doesn’t allow for simultaneous talk and surf. AT&T lets you keep unlimited data when you upgrade, but Verizon has better LTE coverage.

I think the carriers care way more about customer retention than they let on.

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  • jca488

    before renewing and buying I let ATT know I was thinking about Verizon. they gave us $100 credits for each new phone.

  • hanhothi

    “Here is the real reason,”, followed by “it could be”. So the truth is, you have not got a clue really have you! I thought I was going to get some news, rather than vague speculation. Poor show.

  • SupaMac

    haha, exactly what I was thinking. Misleading title.

    “Here is the real reason,”, followed by “it could be”. So the truth is, you have not got a clue really have you! I thought I was going to get some news, rather than vague speculation. Poor show.

  • John Lehmkuhl

    Totally lame article. The Real Reason…. pfft.

  • bigmanbigdreams

    This article was literally pointless… WTH as in it did not have a point… utterly redundant!!! Title says “The real reason” but the article reads as Total Bullshit… How does “My moneys on” correlate w/ the “The real reason”…

  • Thomas Loder

    So buying an iPhone 5 from Verizon and terminating the contract immediately is a cheaper way of buying an unlocked iPhone than just buying an unlocked iPhone from Apple directly? 64gb iphone from Verizon costs $400 (plus $350 early termination fee) = $750. Buying a 64gb unlocked iPhone from Apple is $850! $100 cheaper.

  • Steve Lawrence

    This post is completely contradictory. First you say “First off, don’t think for a second that Verizon is selling the iPhone 5 unlocked for no additional charge because it wants to be nice” and then go on to prophesize exactly that: “My money is that it’s all about constructing a bigger narrative: good Verizon vs. bad AT&T.”

    Can you make up your mind?

  • Christopher Iwan

    You call this an article? My 8 year old could have put more analysis into this.

  • zviivz

    I don’t think Verizon gives a crap about the narrative. But I believe they care about cost. Think about the money you have to spend to lock the phone and then get it unlocked again. What a waste of time. You can’t runaway from the contract. That said, i don’t know of any other country that locks their phone?

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  • theobserving

    “Here is the real reason,”, followed by “it could be”. So the truth is, you have not got a clue really have you! I thought I was going to get some news, rather than vague speculation. Poor show.

    Everything on this site is pure speculation with no real fact behind it. Old news.

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About the author

Alex HeathAlex Heath has been a staff writer at Cult of Mac for over two years. He is also a co-host of the CultCast. He has been quoted by places like the BBC, KRON 4 News, and books like "ICONIC: A Photographic Tribute to Apple Innovation." If you want to get in touch, additional contact information is available on his personal site. Twitter always works too.

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