CNET'S QUICK GUIDE: Unlocked phones

While they were relatively unknown just a couple of years ago, unlocked cell phones have become a hot commodity in North America. But even as they grow in popularity, many cell phone users don't have a clear idea of what unlocked phones are and exactly what they can do. Fortunately, CNET is here to help you make sense of it all.

A few basics
So what is an unlocked phone? Frankly, the best way to answer that question is to first tell you about locked phones. A locked phone is a handset that can be used only on one carrier. Any phone you buy directly from a U.S. carrier will come "locked" to that provider. So for example, if you have a T-Mobile locked phone, you'll be able to use that handset only with T-Mobile service and not AT&T.

Locked phones have long dominated the cell phone market in North America, and if carriers have their way, they'll be around for a long time. As carriers see it, locked phones may not give you a lot of freedom, but in exchange you're able to buy a phone with steep discounts and service rebates. That's why you're able to pay $49 for a brand-new camera phone that's actually worth $299. You may be locked to one carrier, but you saved a lot of money in the process.

Conversely, unlocked phones lack any settings that tie them to a specific carrier. So if you have an unlocked phone, you can use it with either T-Mobile or AT&T. Not only do unlocked phones give you more freedom to choose a carrier, but you also don't necessarily have to give up a much-loved handset if you decide to switch wireless providers.

What's more, the variety of unlocked phones is much wider than the choice of locked handsets. You can get models with unique designs or high-end features such as powerful cameras or music players. You're no longer restricted to buying only those models that your carrier decides to sell. Sound convenient? Well, yes, it is. But before you get too excited, it is important to remember that not all unlocked phones are created equal.