Apple unlocking AT&T iPhone 4 handsets to sell contract-free

Apple retail stores are repurposing locked AT&T iPhone 4 handsets to sell as unlocked, with the news that the checkout systems are able to redefine units as "Device Only." According to 9to5Mac's source, staff at Apple stores are being advised that they can swap in AT&T phones for unlocked iPhone 4 units if they're running low on stock levels.

The AT&T handsets are obviously locked to the carrier, and intended to be sold subsidized and with a new, two-year agreement. However, if marked "Device Only" on the checkout system, when activated they will apparently also be unlocked for use on any GSM carrier. Apple began selling unlocked iPhone 4 handsets in the US on June 14, with the 16GB model priced at $649 and the 32GB model at $749.

It's not clear whether this is an indication that stock levels of the unlocked versions – which come in both black and white – are running low, or if it's simply a useful tip for Apple retail employees. Once unlocked, the iPhone 4 can be used with T-Mobile USA SIM cards after they have been cut down to suit the microSIM slot; however, they'll also be limited to EDGE data speeds, since T-Mobile USA's 3G network uses different frequencies to AT&T's. Nonetheless, it's apparently still a compelling option: T-Mobile USA announced last week that it had 1m iPhones operating on its network.