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Hacked iPhones' Days May Be Numbered

It's panic time for iPhone users who either hacked or purchased so-called "unlocked" iPhones reconfigured for use with wireless networks other than AT&T, the iPhone's exclusive wireless provider.

On Monday, Apple fired off a press release warning that "unauthorized iPhone-unlocking programs available on the Internet cause irreparable damage to the iPhone's software, which will likely result in the modified iPhone becoming permanently inoperable when a future Apple-supplied iPhone software update is installed."

So if you were hoping to check your stock quotes or share photos on an iPhone without having to sign up for AT&T, you may be simply out of luck now that Apple has taken such a firm stance. The company also added Monday that users who make unauthorized modifications to the software on their iPhones have violated the software license agreement and voided their warranty.

"Apple probably has some degree of contractual obligation with AT&T to make best efforts to make sure iPhones don't get unlocked," Gartner analyst Van Baker told InternetNews.com. "It's fair warning. If you're not adhering to the terms of the contract, you run the risk of having a phone that doesn't work and you've violated the terms of the warranty."

Baker said Apple has little choice in issuing this warning, especially in light of all the media attention some iPhone hackers have received in the past two months.

During that time, the story became so widespread that Baker said AT&T probably put some heat on Apple to do something about the problem.

Few hackers received more attention -- or benefit -- from their iPhone handiwork than George Hotz, the New Jersey teenager who traded two iPhones he hacked for a new car (Nissan 350Z), three brand-new iPhones and a paid consulting gig for CertiCell, a Louisville, Ky.-based mobile phone repair company.

Terry Daidone, the co-founder of CertiCell responsible for the swap, didn't immediately respond to an e-mail from InternetNews.com asking if he's still happy with the deal he brokered.

Apple said it has sold more than 1 million iPhones since its debut on June 29. But there is even some drama lurking in that stat. On Sept. 5, Apple CEO Steve Jobs cut the iPhone price from $599 to $399 for the 8GB model and discontinued the 4GB model.

Early adopters who stood in line for hours in June weren't pleased with the dramatic price reduction, so the company sought to appease them shortly thereafter with a $100 Apple Store credit.