N.J. Teen Unlocks Apple's iPhone

Friday was not a good day for AT&T Wireless.

Three separate hacks that fully unlock the Apple iPhone from AT&T surfaced, two of them claiming to be software-only.

Best documented was a hack by George Hotz, 17, of Glen Rock, N.J.

With a little soldering, a lot of command-line computing and about two hours of time, Hotz was able to switch an iPhone over to T-Mobile, which he documented in detail in a YouTube video and on his blog.

• Click here for Hotz's YouTube video.

The iPhone runs on GSM networks, which only T-Mobile and AT&T Wireless run in the U.S. Sprint and Verizon Wireless use the incompatible CDMA standard.

FOXNews.com ambushed Hotz as he was walking down New York's Sixth Avenue, having just finished a brief interview with FOX News Channel's Shepard Smith.

Hotz was talking into a hacked iPhone as we caught up to him, and seemed remarkably nonchalant about his achievement.

"It'll make me a little more famous when I get to college, I guess," he said.

He showed it to us, and sure enough, there were the words "T-Mobile" in the upper left corner of the screen.

• Click here for FOXNews.com's Personal Technology Center.

Hotz collaborated online with four other people, two of them in Russia, to develop the unlocking process.

"Then there are two guys who I think are somewhere U.S.-side," Hotz said.

He knows them only by their online handles.

Hotz is selling one hacked iPhone on eBay, mostly to recoup costs from his summer-long project. Another hacker donated an iPhone to experiment with, which is now a mess of parts and wires, and Hotz needs to buy him a new one. Hotz is keeping a third.

• Click here to bid on the unlocked iPhone on eBay (auction ends Aug. 30).

As of 5 p.m. EDT Friday, bidding was over $4,500.

Other than that, however, Hotz is not seeking any compensation for unlocking the iPhone.

He has posted detailed instructions on how to do it on his blog, and hopes other hackers can streamline and improve his method so that less-tech-savvy iPhone owners can unlock theirs as well.

"I have zero plans to hack any more iPhones," he told Smith. "This will be the last one I sell."

• Click here for Hotz's blog.

AT&T spokesman Mark Siegel and Apple spokeswoman Jennifer Bowcock said their companies had no comment.

Hotz said the companies had not been in touch with him.

The AP's Peter Svensson was able to verify that the unlocked iPhone Hotz brought to the AP's headquarters on Friday was unlocked.

Hotz placed the reporter's T-Mobile Subscriber Identity Module card, the small chip that identifies a phone to a GSM network, in the iPhone. It then connected to T-Mobile's network and placed calls using Svensson's account

The people behind the two alleged software hacks, one of which was well documented by tech blog Engadget, are slightly less noble. They're charging money for it.

Engadget tested out a phone provided by www.iphonesimfree.com, and confirmed it worked with T-Mobile. A video showed an Engadget blogger popping a T-Mobile SIM card in and out of a phone, then making a call with it.

• Click here for the Engadget video and review of its unlocked iPhone.

The iPhoneSimFree people won't say how much they're charging for the software, or whether the iPhones have to be sent in to them physically to be unlocked.

Another outfit, Belfast, Northern Ireland-based Uniquephones, says it will be selling a downloadable software unlock beginning Saturday at www.iphoneunlocking.com. Pricing will be between $25 and $50, according to Engadget.

"That's exactly, like, what I don't want," Hotz told the AP. "I don't want people making money off this."

Both the documented hacks leave intact the iPhone's many functions, including a built-in camera and the ability to access Wi-Fi networks.

The only thing that won't work is the "visual voicemail" feature from AT&T Wireless, which shows voice messages as if they were incoming e-mail.

Apple may be able to counter the hacks, either with a software patch downloadable through iTunes or with physical changes on the iPhone production line.

Although even hacked iPhones have to be bought from Apple, the company is reportedly getting a cut of the monthly subscription fees from AT&T.

In case you were wondering: Yes, this is all legal, at least in the United States.

Late last year, the Library of Congress ruled that under the Digital Millennium Copyright Act, modifying a cell phone so that it runs on a network other than the one it was sold on is not a crime.

Still, since everyone who's bought an iPhone needs to pay a $175 termination fee to AT&T Wireless to break their two-year contracts, any savings achieved by switching U.S. carriers might not be that much.

The real market for unlocked iPhones is in Europe, where the iPhone is not scheduled to be on sale until sometime this fall, and in the rest of the world, which with the exception of South Africa won't see it until next year.

"That's the big thing," Hotz told the Associated Press in a phone interview from his home Friday.

The iPhone's quad-band GSM circuitry ensures that it'll work in almost any country, with any carrier — once it's unlocked.

The iPhone was already made to work overseas using special equipment that hacks the SIM card, the small removable chip containing user and network data every GSM phone needs to operate.

The SIM-chip method doesn't need any soldering, but it doesn't unlock the phone — each new SIM chip has to be reprogrammed for use on a particular iPhone.

"Some of my friends think I wasted my summer but I think it was worth it," Hotz told The Record of Bergen County, which reported his hack Friday.

Hotz heads for college on Saturday. He plans to major in neuroscience — or "hacking the brain!" as he put it to the newspaper — at the Rochester Institute of Technology.

The Associated Press contributed to this report.