iPhone unlocked

A group of anonymous software developers called iPhoneSIMFree team ( http://www.iphonesimfree.com/) said they will soon start selling a program that will allow iPhone owners to use the hugely popular device on cell phone systems around the world and not just with AT&T.

Apple's iPhone, released in the United States two months ago, was engineered to operate for the first two years only on the AT&T system through an exclusive arrangement between Apple and AT&T. It has not yet been sold outside of the U.S.

Los Angeles software consultant Brett Schulte, who is not affiliated with the developers, demonstrated the software for CNN Friday evening. An iPhone that had the new software appeared to work on the T-Mobile system just seconds after Schulte replaced the AT&T SIM card with a T-Mobile SIM card. 

Source: CNN

Here are some more updates and details:

• The unlock process took only a couple of minutes. From our end it was totally painless.
• Once you put your new, non AT&T SIM in the device, you have to go through the usual activation process. This can, of course, be done by anyone anywhere with the right tools (like iASign or iActivator)
• We tested with an active T-Mobile SIM -- after the hack was finished and we reactivated we immediately got full bars and the T-Mobile carrier info popped up in the top bar.
• Everything is otherwise the same, except the menu system now has a couple more options. The root menu has Carrier settings where you can select your preferred network if you don't want to roam.
• The General -> Network menu now has an EDGE network settings area where you can input your carrier's APN and username / password. We put in our T-Mobile info, and were immediately online. (Apparently these hidden menus were added in the 1.0.1 update, they tell us. How convenient!)
• Visual voicemail isn't in the cards -- sorry. That was, of course, to be expected because it's a special AT&T network-specific feature right now. When you hit the voicemail button you are taken immediately to your carrier's default voicemail line though, and that works just like it would on any other phone.
• Everything is confirmed as working on a non-AT&T network: SMS send / receive, internet (including Safari, Mail, Google maps, etc.). YouTube doesn't work out of the box, but that's to be expected. If you're not on AT&T you have to manually activate YouTube -- here's the guide on how to do that. (YouTube is the only app you have to activate like this.)
• We know, it's kind of crazy, but this isn't a hoax.
• No, sorry, you can't have our unlocked iPhone.

Restore / upgrade resistance

• The iPhoneSIMfree.com guys claim this method is restore (though not necessarily upgrade) resistant. We have no way of knowing whether Apple will be able to disable this SIM unlock with future iPhone software updates, but we can confirm that it is restore-resistant.
• We performed a full restore (v1.0.2) on our iPhone and successfully activated it using an inactive AT&T SIM.
• After fake-activating our iPhone, you merely pop out the AT&T SIM, put in the foreign SIM of your choosing, reactivate, and you're done. "Boom," as Steve might say.
• Restoring from an iPhone backup in iTunes worked perfectly despite the lock and foreign SIM. The only thing to notice was the phone number is now listed as "n/a" in iTunes. Big whoop.
• No, seriously. You can't have our unlocked iPhone.