The New York Times has revealed that a seventeen year old has spent his summer vacation in an interesting way - apparently he has been able to unlock Apple’s celebrated iPhone, making it useable on other cellular telephone networks. Hackers have been attacking the iPhone right from the beginning, as reported in Display Daily on July 6th, although early reports of success were not well verified. The timing couldn’t be worse, coming just before Apple is to expected release details of a joint venture with European phone companies. Of course the only other cellular telephone company (celco) in the US supporting the iPhone GSM technology is T-Mobile, but that hasn’t stopped the modified phone from hitting a reported $10,000.00+ price tag on eBay.

Aldo Cugnini
Analyst

The teen, a resident of New Jersey, has already published detailed instructions on the Internet. While his procedure uses a combination of hardware and software modifications, it is believed by some that a software-only solution is possible. Also other organizations have managed to unlock the phone, including UniquePhones, which makes a business of unlocking carrier-specific phones. The modifications appear to enable all functions, except for "visual voice mail". In any event the hacks so far are beyond the capabilities of the average user - but that could change, especially with an all-software hack.

AT&T officials were none to pleased with the developments, and their lawyers contacted UniquePhones over the weekend, citing "copyright infringement and illegal software dissemination", according to a blog site. It is not known whether the tactic will ultimately succeed in blocking the release of the company’s software. However, according to a company spokesperson, UniquePhones will not release its unlocking software, until an assessment is made of the potential of legal action.

Celcos, of course, base their business model on agreements with the handset manufacturers - and have historically dictated those terms. The iPhone represents a departure from this in that Apple called the shots and picked their provider. There are some however, who believe that the tide may be turning, and both business models are in jeopardy, as consumers increasingly want device portability and service independence.

Neither AT&T nor Apple has made any public statement so far. However, with the tens of millions they’ve invested in services and products, they’re bound to make a big deal of this. While the government has issued an exemption to the Digital Millennium Copyright Act, the exemption seems to apply to individuals not to companies selling specific unlocking solutions.

Again, the whole issue comes down to copyright. When consumers are sold software, or hardware containing software, they’re often required to execute an end user licensing agreement that specifies that the software is being leased to the consumer and remains the property of the vendor. A similar limitation applies to audio and video content, wherein the consumer is currently allowed to make copies for their own use, yet does not own the material.

Current copyright laws are a maze of technicalities, having been set up predominately to protect the interests of the content owners. However, the growing movement towards DRM-free content ownership may spell the way towards a change in copyright laws, and give the consumer more control over their software. The same may eventually happen with cellphone exclusivity. Cellular service providers are going to have to wake up and provide real benefits - better service and competitive rates - to attract and hold increasingly techno-savvy customers

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