The iPhone will now be available to buy for a princely sum of €999 (£717) unlocked - a price that's considerably higher than the €399 price tag of the iPhone on a two-year T-Mobile contract.
T-Mobile has also said that certain iPhone functions will no longer work if T-Mobile consumers who've already bought an iPhone decide to get their devices unlocked.
T-Mobile took the decision to sell iPhones unlocked after Vodafone won a court injunction against it.
Vodafone argued that selling iPhones with locked SIM cards was anti-competitive under German law. However T-Mobile said in a press statement that it will appeal the decision, and may even seek compensation from Vodafone for the aggro it has caused.
T-Mobile Germany spokesman Philipp Humm certainly believes the T-Mobile deal represents great value for iPhone users. It has the best EDGE and Wi-Fi hotspot coverage in Germany, Humm says. He also argues that T-Mobile's iPhone's flat-rate voice and data tariffs are 40 per cent cheaper than if you had to buy them individually.
This is the second time that exclusive iPhone deals have gone awry in Europe. Orange is also expected to sell unlocked iPhones in France thanks to similar anti-monopoly regulations there.
If £717 sounds like a lot. It is. Expansys currently sells non-contract smartphones and the iPhone eclipses the new 8GB Nokia N95, which is priced at £605. It's also pricier than the Sony Ericsson P1 (£290); the Blackberry Pearl (£285); and the Treo 750 (£515).