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Firmware update 1.1.1 will relock user's iPhones and force them to activate with AT&T.  (Source: Apple Inc.)
Apple has released its new firmware update, which alters unlocked iPhones

Those rushing in droves to unlock the Apple iPhone may be in for a surprise when they try out Apple's newest firmware update; version 1.1.1.

Apple released a statement earlier this week that, "Apple has discovered that many of the 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."

Phil Schiller, Apple's senior vice president of worldwide product marketing, claims, "This has nothing to do with proactively disabling a phone that is unlocked or hacked.  It's unfortunate that some of these programs have caused damage to the iPhone software, but Apple cannot be responsible for ... those consequences."

It turns out that the reports are true -- somewhat.  Apple released its controversial iPhone firmware update yesterday.  Among its new official features:

• iTunes Wi-Fi Music Store
• Louder speakerphone and receiver volume
• Home Button double-click shortcut to phone favorites of music controls
• Space bar double-tap shortcut to intelligently insert period and space
• Mail attachments are viewable in portrait and landscape
• Stocks and cities in Stocks and Weather can be re-ordered
• Apple Bluetooth Headset battery status in the Status Bar
• Support for TV Out
• Preference to turn off EDGE/GPRS when roaming internationally
• New Passcode lock time intervals
• Adjustable alert volume

iPhone unlocking has become very widespread, thanks to two key software offerings:  iPhoneSimfree and anySIM.  These programs "unlock" the iPhone and allow it to work on T-Mobile's compatible EDGE network.  In foreign countries, unlocking the phone's SIM card to other networks is the only way to currently enjoy phone service outside the U.S.  AT&T only provides service within the U.S.  England, France, and Germany are all getting dedicated providers in November, but until then or in other countries, there is no way to use the iPhone without unlocking it. 

It is unknown how many unlocked users there are but with over a million iPhones in the wild there is likely a substantial number.  The iPhoneDev group, based on the number of people who downloaded their software, thinks there are "several hundred thousand" users of unlocked iPhones-- a figure Piper Jaffray's Gene Munster takes as a rough upper bound. "Even if the average hacker downloads the software twice, that's still over 100,000 hacked," he says. "The story is far from over."

Apple CEO Steve Jobs has publicly denounced iPhone unlocking, saying Apple vowed to fight it and that "It's a constant cat and mouse game."

Firmware update 1.1.1 works perfectly on normal iPhones, with no reported issues, as expected. 

The update also does not destroy unlocked iPhones, contrary to what Apple indicated might happen.

It does however render them useless, unless you are willing to get an AT&T contract. and any other unlocking associated software is rendered useless by the update, as well.  It is still in the stored on the phone, but the application will no longer appear on the screen.  Further, the update puts unlocked iPhones into the Activation screen that awaited normal users when they first purchased their phone.

At the activation screen, users can try to activate using a valid AT&T activation card and iTunes.  The update appears to render iPhones unlocked by certain modification programs unable to activate at all, according to early reports.  For these applications, users replaced the unlocked SIM card with a fresh one to no avail. 

The program IPhoneSimfree allows iPhone activation with the AT&T card and iTunes, according to a statement from the software providers.  After activation, the iPhone will operate as normal, but will be locked to the network.

It has not yet been fully tested whether the phone can subsequently be unlocked by any means without at least partially crippling the device.  Part of unlocking software's operation relies on updating the seczone region of the phone's memory.  The firmware update apparently clears any updated values and restores the memory to its default configuration, relocking the phone to the AT&T network.  Further, the firmware update may have additional changes to help prevent this zone of the memory from being accessed.

iPhone users on 3rd-party networks should not install the 1.1.1 update if they wish to continue to use a non-authorized network.  The update is voluntary, so there is nothing stopping you from not doing so.

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By ltcommanderdata on 9/28/2007 5:09:27 PM , Rating: 3
Well, in this case the Magnuson-Moss Warranty Act likely wouldn't apply:

(c) Waiver of standards
The performance of the duties under subsection (a) of this section shall not be required of the warrantor if he can show that the defect, malfunction, or failure of any warranted consumer product to conform with a written warranty, was caused by damage (not resulting from defect or malfunction) while in the possession of the consumer, or unreasonable use (including failure to provide reasonable and necessary maintenance)

The iPhone's warranty states:

This warranty does not apply: ... (e) to a product or part that has been modified to alter functionality or capability without the written permission of Apple;

It's also clearly presented in their Support FAQ:

pple reserves the right to refuse service on iPhones that are outside their warranty period if damage has occurred due to accident, abuse, misuse or unauthorized modifications.

Seeing that a firmware update to unlock the phone would be considered a modification to alter functionaility or capability of the iPhone Apple would be within their rights to refuse warranty based on their policy. Magnuson-Moss would likely allow such an exclusion since it conforms to Apple written warranty policies and the damage was caused while in the consumer's possesion.

That would be for a lawsuit based on whether unlocking gives Apple the right to void warranty. The other argument is that Apple caused the damage to the phone by creating/releasing this firmware update. But for this challenge to work, you would have to prove that Apple specifically designed this firmware to target and disable unlocked phones. That would be very hard to prove.

I'm no legal expert, but that's how I read it.

By Dactyl on 9/28/2007 5:54:52 PM , Rating: 3
Well, in this case the Magnuson-Moss Warranty Act likely wouldn't apply
Thank you for pointing that out.
The other argument is that Apple caused the damage to the phone by creating/releasing this firmware update. But for this challenge to work, you would have to prove that Apple specifically designed this firmware to target and disable unlocked phones. That would be very hard to prove.
I don't necessarily agree. If someone sued Apple, they could hire expert witnesses who would be allowed to analyze Apple's source code and testify at trial whether they thought Apple deliberately bricked the phones. Depending on how Apple wrote the code, it might be very obvious that this was intended all along to brick the phones.

It is hard for me to understand what reasonable explanation Apple would have for modifying a part of the phone that would cause unlocked phones to become bricked. Assuming that Apple's modifications even accomplished anything, what was it that was so important to accomplish that Apple had to meddle with the phone's private parts?

Also, there might be another way to get Apple. There is something called the "implied covenant of good faith & fair dealing," which in plain English means, when you make a deal with someone, you should be able to expect them to treat you fairly.

Deliberately bricking peoples' phones after a sale is not nice and not fair. If Apple breached that, that's like breaching its contract with its users. Apple would have to restore its users to their pre-brick state, which means fixing, replacing, or refunding the bricked iPhones, and paying people for money they lost as a result of not having a working cell phone.

By borowki on 9/29/2007 7:24:45 AM , Rating: 2
Remember, it's the people hacking the phone who were acting in bad faith in the first place. Apple sold them the phone with the understanding that it's going to be used on the AT&T network. They signed the contract. It's crazy to think that the courts will uphold some sort of right to breach a contract.

By clovell on 10/1/2007 11:10:35 AM , Rating: 2
No, I don't think signing a contract with AT&T was compulsory when you purchased the phone. And besides, I think breaching a contract with AT&T is a separate legal matter from what's being discussed here.

"This week I got an iPhone. This weekend I got four chargers so I can keep it charged everywhere I go and a land line so I can actually make phone calls." -- Facebook CEO Mark Zuckerberg
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