Group Unlocks Apple's New iPhone

http://online.wsj.com/article/SB123093342359249973.html

JANUARY 3, 2009
Group Unlocks Apple's New iPhone
By YUKARI IWATANI KANE

A band of independent programmers says it has "unlocked" the latest generation of Apple Inc.'s iPhones so the devices can be used on unauthorized wireless networks, in a move that could threaten Apple's carrier partners.

Since the original iPhone was launched in June 2007, Apple has struck partnerships with wireless carriers world-wide, such as AT&T Inc. in the U.S. and France Telecom SA's Orange unit. Under the agreements, the iPhone can generally be used only by subscribers to those carriers.

But on Wednesday, a group called the iPhone Dev Team released a free piece of software called "yellowsn0w" that unlocks the iPhone 3G. The software lets users reprogram the phones so they can work on any wireless network based on the same technical standard.

Several users said they successfully installed the software on their iPhone 3Gs and were able to make calls on non-authorized networks.

An Apple spokeswoman declined to comment on the iPhone Dev Team's work, only saying that Apple doesn't support unlocked iPhones in the U.S. Apple offers such phones in Germany and Hong Kong "where government regulation requires it" but they usually come at a steep price.

Software programmers have been trying to unlock the iPhone 3G since it came out last July.

The development could lead to a loss in revenue for Apple's wireless partners. International travelers would be able to buy airtime for their iPhones on local wireless networks when they travel abroad, so they don't have to incur steep roaming charges.

Consumers in markets where Apple hasn't yet launched the iPhone could also buy the device elsewhere and use it in their home countries. In China, for example, consumers can already buy previous generation iPhones that have been smuggled in and come unlocked.

In the U.S., "the iPhone is meant to be used exclusively on the AT&T network. Any other use of the device is inappropriate and would void the warranty," said an AT&T spokesman.

The iPhone Dev Team is the same group that unlocked the original iPhone model more than a year earlier. The team didn't immediately respond to a request for comment.

Write to Yukari Iwatani Kane at yukari.iwatani@wsj.com