It seems that efforts to break the iPhone out of the shackles that Apple as placed on it are going extremely well, with the first true full application becoming available just a few days ago, now huge progress has been made on the carrier side. By using a SIM reader/writer, a special SIM card can be created that will allow the phone to wok on virtually any network.

The method is rather complex and consists of reading the information from the AT&T SIM card that came with the iPhone and the SIM card that you intend to use the phone with, and combining this information to create a new SIM card. The resulting SIM will be accepted by the iPhone, because it will think it is the original AT&T card it came with, and it will also be accepted by the carrier in your country because they will believe that it is the card that you used to gather the information from.

This process has already been tested by several users of the Hackintosh forum, with success. The process has worked with O2 in the UK and with an unknown carrier in Macedonia among others, and there is no indication that the process will not work fine in any and all countries. As expected, there is a high level of interest in this particular hack, however, the technical complexity of the task, the required hardware as well as the need for a special version of the SIM card that will be used make it an arduous process.
The results of the hack are excellent, with both calls and text messages working perfectly, both incoming and outgoing. Visual voice mail will obviously not work because the carrier needs to support it, but regular voice mail can still be accessed, simply by calling the number that you did with your old phone. Data is also a slight issue because of the fact that European carriers do no support EDGE, however, Wi-Fi works fine, and when Apple does release a 3G iPhone that will work perfectly.

While so far the interest in this method of unlocking iPhones is restricted to just hardcore fans, it could easily become widespread. Money-wise, this hack will cost approximately $100, however, the bulk of this is the hardware needed to be able to read and write SIM cards, the blank card that actually gets used in the process usually costing under $10. As such, large scale iPhone unlocking can be incredibly cheap as the hardware is reused. With bulk unlocks, the cost per iPhone could become as low as $15, and with the possibility of the device working in countries where potential customers might have many months to wait until the official launch, sales of unlocked iPhone could become a very profitable business. Apple is expected to put a stop to this sooner or later, however because the hack is at the SIM level, the company might not be able to even detect such hacked phones, let alone prevent them from happening.