If you've got an existing contract with a cellular provider that isn't AT&T/Cingular, you probably turned green with envy when you heard that the iPhone will be locked to Cingular's network. This is nothing new: in the U.S., around 90-95 percent of all handsets are sold through a service provider. American service providers have long used handset subsidies to keep customers locked into their network and hardware offerings. By contrast, somewhere around 80 percent of all handsets in Asia and 70 percent of phones in Europe are sold unlocked.

Things in the U.S. may change, however, as a few handset manufacturers are experimenting with direct-to-consumer sales. Nokia has opened a few retail stores in the U.S. where it sells unlocked phones and is also selling handsets through other high-end retail channels. CompUSA has also begun selling unlocked handsets from vendors like Motorola, Nokia and Sony Ericsson. Will phone vendors soon expand their unlocked offerings in the States? It's not very likely, considering the delicate relationship between vendors and the major carriers. "We would welcome a path that provides more direct sales access to consumers, so we can promote our brand," said Bruce Brda, vice president at Motorola. "But today the carrier subsidizes the phones, and that's great because it makes our phones more affordable to more people. Until that goes away, I see unlocked phones being a very small piece of our business in North America."

For more on unlocked phones:
- see this CNET article