Apple is now selling an unlocked version of the iPhone 4 in its online store, confirming earlier rumors which hinted this would be the case. The new iPhone 4 is the GSM model, which means here in the U.S., AT&T or T-Mobile only. The phone works outside the U.S. on any other supported GSM network offering micro-SIM cards for the iPhone 4.

Most importantly, the unlocked iPhone 4 is available contract-free.

What this means is that you can now buy an iPhone and use it on the carrier of your choosing, without having to sign a lengthy multi-year agreement. You can change carriers at any time, or even change from carrier to carrier as you travel overseas and back.

In order to use the iPhone on a different network, you'll have to purchase a micro-SIM card from a local carrier. This is the small memory card used in the iPhone 4 to store your account information. The micro-SIM slot is accessible on the right side of the device, but you'll need a paperclip to open it, if you're performing the swap yourself.

iPhone 4 on T-Mobile

This news also makes it easy (and legal) to use the iPhone 4 on T-Mobile's network here in the U.S., a feat that had typically required "jailbreaking" (hacking) the phone and then running a secondary software program to perform the unlock procedure. However, it should be noted that on T-Mobile, the iPhone 4 will only be able to reach EDGE speeds, not 3G and definitely not HSPA+, T-Mobile's faster "4G" network. In other words, the iPhone will work on T-Mobile, but it will be slow.

Because the unlocked iPhone is a GSM phone, it does not work on Verizon or Sprint in the U.S., both of which are CDMA networks.

But Apple says that the unlocked iPhone 4 can do everything its locked counterpart can, including FaceTime video calling, HD video recording and more.

So how much will you pay for this new option? It's $649.00 for the 16 GB iPhone 4 or $749.00 for the 32 GB version. Oh, and it comes in both black and white, but the white one ships a little slower: 3-5 business days for white vs. 1-3 for black.