The concept of unlocked cell phones goes like this. Carriers that operate on the Global System for Mobile Communication (GSM) such as Cingular Wireless, AT&T Wireless and T-Mobile use a Subscriber Identification Module (SIM) card. The SIM card is a microchip that stores subscriber data. It is issued by a carrier and provides cell service by activating any phone into which it is inserted.
A locked phone, as we are used to, will only recognize a SIM card from a particular carrier. An unlocked cell phone, on the other hand, will recognize a SIM card from any carrier. If this sounds like a new thing to you, it really isn't. In fact, in Asia, about 80% of cell phones are sold unlocked. And in Europe, roughly 70% of cell phones are sold independently of a carrier. Only in US from 90% to 95% of cell phones are locked to a mobile service provider.
Why? Because the carriers subsidize the cost of handsets. Operators usually knock off $50 to $80 from the cost of the phone. This has greatly expanded the market by making phones more affordable but it has also given mobile operators complete control on the cell phones they sell or give away for free.
U.S. cellular operators have been slow to pick up some of Nokia Corp's high-end N-series phones, which offer high-mega pixel camera and a host of other features that are not found on many phones. This led Nokia to open stores in Chicago and New York to sell their unlocked phones. Getting unlocked cell phone gives you a freedom to choose among a variety of cell phones and their features without being locked into a new one or two-year contract.
Buying unlocked cell phones will turn to buying cheap unlocked cell phones if you travel overseas. Then you can buy prepaid SIM cards that are designed to work in the country you are visiting. This is cheaper than making out of the country calls through your cell phone carrier. You might even find the service more reliable.
Choosing to buy unlocked cell phones will give you a choice to switch cell phone providers without losing your phone. After all, if you have a perfectly good phone, why should you buy a new one? You can also give away your phone if you want to upgrade features or sell it and put the money towards your new unlocked cell phone.