Unlocks IPhone From AT&T Network By Teen

The procedure, which the 17-year-old posted on his blog Thursday, raises the possibility of a cottage industry springing up to buy iPhones, unlocking them and then selling them to people who don’t want AT&T service or can’t get it, particularly overseas.

The phone, which combines an innovative touch-screen interface with the media-playing abilities of the iPod, is currently sold only in the U.S.

An AP reporter was able to verify that an iPhone Hotz brought to the AP’s headquarters on Friday was unlocked. Hotz placed the reporter’s T-Mobile SIM card, a small chip that identifies a phone to the network, in the iPhone. It then connected to T-Mobile’s network and placed calls using the reporter’s account.

T-Mobile is the only major U.S. carrier apart from AT&T that is compatible with the iPhone’s cellular technology, but smaller carriers also use the technology, known as GSM. In Europe and Asia, GSM is the dominant network technology.

The hack is complicated and requires skill with both soldering and software, and missteps may result in the iPhone becoming useless, so few people will be able to follow the instructions.

“But that’s the simplest I could make them,” Hotz said.

Technology blog Engadget on Friday reported successfully unlocking an iPhone using a different method that required no tinkering with the hardware. The software was supplied by an anonymous group of hackers that apparently plans to charge for it.

AT&T spokesman Mark Siegel and Apple spokeswoman Jennifer Bowcock said their companies had no comment on Hotz’ exploit. Hotz said the companies had not been in touch with him.

Apple shares rose $4.23, or 3.2 percent, to close at $135.30 on Friday. AT&T shares gained 26 cents, or 0.7 percent, to close at $40.36.

The iPhone has already been made to work onoverseas networks using another method, which involves copying information from the SIM chip, or Subscriber Identity Module.

The SIM-chip method does not involve any soldering, but does require special equipment, and it doesn’t unlock the phone _ each new SIM chip has to be reprogrammed for use on a particular iPhone.

Both 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, which lists voice messages as if they were incoming e-mail.

Since the details of both hacks are public, Apple may be able to modify the iPhone production line to make new phones invulnerable.

Analysts said it’s unlikely Apple would overhaul the iPhone’s wiring to thwart the new hack because the difficulty of the procedure is likely to keep it confined to hardcore hobbyists.

“I’m having a hard time figuring out where the real pain is going to come from in this,” said David Chamberlain, principal analyst with market researcher In-Stat who follows mobile devices and services. “Just selling the piece of hardware, they’ve made a niceprofit off that.”

Apple has said it plans to introduce the phone in Europe this year, but it hasn’t set a date or identified carriers.

There is apparently no U.S. law against unlocking cell phones. Last year, the Library of Congress specifically excluded cell-phone unlocking from coverage under the Digital Millennium Copyright Act. Among other things, the law has been used to prosecute people who modify game consoles to play a wider variety of games.

Hotz collaborated online with a large number of people to develop the unlocking process. Of smaller core group, two were in Russia.

“Then there are two guys who I think are somewhere U.S.-side,” Hotz said. He knows them only by their online handles.

Hotz himself spent about 500 hours on the project since the iPhone went on sale. On Thursday, he put the unlocked iPhone up for sale on eBay, where the high bid was at $12,600 late Friday. The model, with 4 gigabytes of memory, sells for $499 new.

“Some of my friends think I wasted my summer but I think it was worth it,” he told The Record of Bergen County, which reported Hotz’s hack Friday.

Hotz heads for college onSaturday. He plans to major in neuroscience _ or “hacking the brain” as he puts it _ at the Rochester Institute of Technology.