First full software unlock achieved on iPhone

The latest iPhone unlock could see Apple's phone working on Euro GSM networks

In a move that spells trouble for AT&T (and has allowed people outside the US to rejoice in unison), Apple's iPhone has been fully unlocked by a software-enabled solution.

First announced by those who created the software and operate at , the software hack effectively allows people from all over the world to add their iPhones to any existing GSM network.

iPhone hacking 101

The internet group has yet to publish the details of the unlocking procedure because of its plan to sell service starting next week.

That said, Engadget broke the story over the weekend by corroborating the claims made by the group. Engadget editor in Chief Ryan Block reported that: "Last night the impossible was made possible: right in front of our very eyes we witnessed a full SIM unlock of our iPhone with a small piece of software."

The full unlock comes almost two months after the iPhone's US release. Like most cell phones in the US, the iPhone was locked upon release. It required non-AT&T customers to commit to a 2-year AT&T contract to purchase the device, or opt for a "pay as you go" plan.

Most people in the UK have been content to sit tight for the European release, hoping that Apple will release an enhanced 3G version. This new software unlock, however, may rekindle interest in the US-only phone. Especially as no Euro launch dates have been revealed.

Is there a catch?

Interestingly enough, the iPhone is only "unlocked" after it's activated on AT&T's network. Once service is cancelled, the iPhone is rendered useless -- it's unable to make calls or access the AT&T EDGE data network.

According to Engadget, the unlock apparently stays intact, even after a software restore, but the process still requires a roundabout AT&T activation using third-party tools.

So far, Apple has declined comment on this matter. Although the company will undoubtedly benefit from the unlocking, as an unlocked iPhone will surely precipitate higher iPhone sales. The only real loser here is AT&T and it could be a warning shot for any UK network that is currently negotiating with Apple for exclusive sales rights.