New iPhone unlocking software hits market as it goes on sale in Europe

Apple Braces for Unlocked Iphones to Hit Europe

The arrival of new unlocking software for iPhones on Friday highlights a major challenge for Apple as it starts selling iPhones in Europe.

Just hours after Apple's iPhone went on sale Friday in the UK and Germany, hackers were distributing new "unlocking" software so iPhones could use a variety of cellphone networks, according to various reports on Apple-focused Web sites.

Cellphone operators in Germany, the U.K. and the U.S. sell their iPhones locked to their networks, the result of the exclusive arrangements they have with Apple.

European operators on Friday warned that unlocking iPhones isn't a good idea for a variety of reasons.

In the case of O2, the U.K. operator, it means no access to O2's unlimited data packages or its visual voice-mail feature. O2 has the exclusive rights to sell the iPhone in the U.K.

"In short, it makes no sense to buy an iPhone in France for use in the U.K.," said 02 spokesman Lloyd Simon.

Rumors Friday of unlocked iPhones for sale in Germany, however, attests to how European Apple fans are clamoring for such a development.

Consumers in the U.S. also are unlocking their iPhones. According to AT&T, a sizable percentage of the iPhones it has sold hasn't been activated on AT&T's network. The assumption is they were unlocked and used on other networks.

There's reason to believe the number of unlocked iPhones worldwide will increase after Nov. 29, when the iPhone debuts in France. French law requires cellphone operators to make available phones that are unlocked.

Apple and its French operator partner, Orange, are expected to comply with the French law, thus providing the first opportunity to buy an unlocked iPhone.

Apple didn't return calls and emails Friday seeking comment.

Further muddying the situation is that Apple and Orange have yet to confirm whether they will, and how they will, comply with the French law.

Apple Braces for Unlocked Iphones to Hit Europe