=)you are almost there

You're trading one SIM card on the AT&T/Cingular network for another. Yes it means you wouldn't have to sign up for a new contract but still.

There isn't a GSM service that I'd use anyway so even if I wanted an iPhone, I couldn't use it. Sprint and Verizon continue to use CDMA and those are the only two services I'll use. Currently with Verizon though.

AT&T can detect that is an iPhone, and can probably cut off access saying the phone is sold with the requirement of a new 2 year term.

Just a guess of what iwll ahppen if this becomes common place.

Wouldn't this be considered reverse engineering and circumventing security protocols? I mean I am all for them breaking it just because I hate Apple's fully closed thinking (Everything they build is a closed system). I guess if they don't look to be paid for their efforts there is no legal ramification?

Aren't AT&T and TMobile the only GSM providers in the US? I thought the rest used CDMA. I don't think the iPhone has the hardware for CDMA, does it?

it has the wcdma chip, which is the GSM version of 3G.
Also, there are many gsm provider in US..check out www.gsmworld.com

Unlocking the phone will not only benefit US customers, but anyone who uses a GSM network around the world can use the phone.

How can iPhone locking help Apple OR customers at all? My brain fails me. I still never got an answer.
It may as well be GSM (this is what the whole rest of the world is using anyway). This part doesn't bother me.
To the point, let the hackers unlock all they want. It might even help Apple sell more units. It's not like small underground pirate shop can make fully functional iPhones - even if they had the full source code. Did you ever see a knock off 07' Honda Civic (as good as a new civic) for $100, $1000, or $10,000, same idea, it will never/can't happen.

I'm guessing Apple has an exclusive deal with AT&T. Breaking the iPhone protection could be bad news for Apple. But then again, if this were true they'd have let loose their lawyers with cease and desist letters or lawsuits...

Like Mark said. Without the flexibility of using other SIM cards, Iphone's use is limited by the coverage of its carrier. by unlocking it, it ought to be able to be used with any carrier that uses SIM cards around the world.

It is obvious, the locking of iPhone in the US is because of the "normal" business culture.

Carriers provide services. If they do it badly, many will turn around and their hardware infrastructure will become wasted and their investment will become wasted as well.

So, whenever there is a killer phone, or some really good models, they want to sign contracts with the mobile phone company to lock into their exclusive service.

GSM is for the world. So, Apple sure will choose this as the first step. Also, Appla requires a large carrier to implement their iPhone services.

Why Apple requires a closed system? Because, then, they could provide the service on their own like music purchase and service support and own the market.

Today, everyone wants everything to be free of charge and free of advertisements! Is there a way to survive for a business? Absolutely no!

To Apple, they don't want to use ad. supported system. If a low fee or a competitive price is needed, they need that closed system to own the "mass" market".

All in all, they need to take risk. At the moment, seems only AT&T is willing to bet on Apple.

I have been waiting patiently for this to happen, as soon as the iphone is fully unlocked. I'll ask a relative in the US to bring me one, I can't wait next year to get hold of this gadget. My only worry is will it ( unlocked ) be short of the model that will be release for Asian consumption.

After all, if the hack is based on s/w, it just becomes a matter of how long it will take for Apple to work around the workaround.

Unlike every other mobile I've owned, I can see myself getting regular updates to the iPhone's software; this means I'll just have to switch back to the AT&T SIM the next time I synch to get the latest episode of Heroes onto my phone.

Believe it or not, it is completely legal to unlock cell phones in the U.S. Therefore the iphone dev wiki guys are not really risking anything, no C&D letters will be sent their way.

If fully unlocked it can be used on Europe. So just before Apple makes a deal with major European carriers we will be already using it in Europe.

I wonder how many bids devices on ebay will get from Europe...

Great work!