Why is unlocking iPhones so expensive?

About three months ago iPhone unlocking prices increased dramatically. While understanding why this happened won’t change the circumstances many have asked the obvious question, why? In order to provide a meaningful explanation let’s start with some background.

What is unlocking?

When you purchase a GSM phone it is most likely “locked” to a specific carrier. This lock is intended to encourage customer loyalty by making it impossible to use a foreign wireless provider. Foreign meaning any network other than the one that you are currently using. One of the services that we provide is “unlocking” which allows you to use your phone with another network. Once your phone has been unlocked you mat choose to use any GSM wireless provider that you choose. You can also use your phone outside of the US when traveling abroad without incurring steep “roaming” fees.

Is this the same as jailbreaking?

Unlocking is not the same as jailbreaking although in some situations it may be possible to unlock a jailbroken phone.

How are iPhones unlocked?

As of January 26th 2013 any cell phone purchased after that date can only be unlocked with your original carriers permission. This policy was clarified by the Library of Congress based on the Digital Millennium Copyright Act of 1998. Unlocking for iPhones is achieved by getting authorization from your carrier and processed by Apple using iTunes. This procedure requires a third party server to communicate information between the wireless carrier and Apple.

Why did the cost of unlocking iPhones go from $30 to as much as $175?

A few months back, AT&T shut down the majority of it’s iPhone unlocking servers. While we don’t have an official statement from AT&T, it is assumed that this took place in order to increase customer retention. This makes unlocking difficult as there is now only one source available to process unlocking requests. As the law of supply and demand dictates market value, the sole supplier of unlocking services may charge whatever they feel that the market will bear. We hope that eventually there will be more options to choose from so that the price will be reduced.

Are you making a huge profit from unlocking iPhones?

No. We make a small profit from unlocking phones as the majority of our fees go to a third party to pay for the cost of completing the unlock request. We structure our prices to be competitive while focusing on providing the best quality service possible.

Will the price go down eventually?

We certainly hope so. With the DMCA being in effect it is difficult to know for sure. The good news is that there is legislation proposed that would make it easier to get your phone unlocked. We will keep you posted.

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