Verizon's iphone 5 or factory unlocked iphone 5?

Verizon gives iphone 5 at 199$ and the factory unlocked iphone 5 costs 649 $.
the verizon's iphone is already unlocked too.
so, why should anyone by an iphone for 649$ when its available for much cheaper rate as 199$?

Because you'd have pay to activate the phone through Verizon, plus their fees & then wait, & then pay again to cancel the contract.

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