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A UK firm that specialises in unlocking mobile phones reckons it's close to developing an application that would allow iPhone owners to use the device with carriers other than America's AT&T.

John McLaughlin, founder of Uniquephones, told IDG that his software engineers were working "around the clock" in order to bypass Apple's restriction that ties activation of the iPhone to signing up to a two-year contract with AT&T.

Uniquephones said it is "almost ready" to release a public beta of iPhone unlocking software. It claims the pre-release technology is already able to unlock 75 per cent of all the iPhones it has tested using unlock codes generated from the phones' IMEI (International Mobile Equipment Identity) numbers.

Uniquephones plans to sell software designed to unlock iPhones for around $50, far more than it charges to unlock other mobile devices. The firm is highly unlikely to be the only outfit getting into the act.

Hackers have been hard at work trying to unlock the functionality of the iPhone since the devices were released in the US a week ago. Reverse engineer Jon Lech Johansen (DVD Jon) discovered a way to get iPod and Wi-Fi - though not the phone - features of the device working without signing up to AT&T within three days of its release.

The iPhone Development Project claims to have replicated this and has set out a program of goals including the ability to unlock the phone and run third party applications on the device.

Last year, the US copyright office ruled that it was legal for consumers to unlock their mobile phones in order to use them with other carriers, a decision AT&T and Apple may seek to contest, but one which gives hackers (and commercial firms) some leeway in opening up the functionality of the iPhone.

Uniquephones said it's received more than 150,000 inquiries from punters in learning how they might be able to unlock their iPhones since last weekend, many of whom have submitted their IMEI numbers. Complaints about the slowness of AT&T's data services are among the factors generating this interest, according to McLaughlin.

Prising an iPhone away from its ties with AT&T is a more complex business than providing an unlock code. Firstly, it's necessary to make changes to an AT&T SIM other than the one supplied with an iPhone that can work with the phone and be activated through iTunes. After this has been achieved there's still the problem of cracking the protection that means attempts to change the iPhone's firmware in order to support another carrier's SIM card can break the phone.

Even then the device would only work on GSM-based US networks and could be undone if Apple issues a firmware upgrade (through the iPhone synchronisation process) or frustrated by legal challenges. McLaughlin concedes that Apple is likely to take legal action against Uniquephones based on changes its unlocking process makes to the firmware loaded on iPhones rather than the act of unlocking the phones, which is legal. "They'll probably come after us for copyright infringement," he said. ®

Internet Security Threat Report 2014

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