Unlocked iphone, any downfalls or anything I should know about before making the trade?

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Unlocked iphone. I have a phone and I am currently trying to decide whether I should trade for an iphone or not. Its an unlocked 2nd Gen iphone. Is there any downfalls to using a unlocked iphone? I heard that you will not be able to update software and such. Is there anything that I should know before making the trade?

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