A NEW JERSEY teenager has broken the locks on Apple’s iPhone, a move that threatens to ruin exclusive deals Apple has negotiated with mobile-phone carriers worldwide.

George Hotz, 17, of Glen Rock, spent 500 hours tinkering with the $499 phone’s software and rewiring it with a soldering iron. He has posted a guide showing people how to unlock their iPhones in two hours on his blog (http://iphonejtag.blogspot.com/ ).

On Saturday bids for a second phone Hotz has hacked had reached $40,500 on eBay.

Hotz’s intervention means the US phone can run without AT&T, with whom Apple has a two-year exclusive deal. AT&T has paid undisclosed millions for the deal.

The phone/music player/internet device caused a storm of publicity in the US when it was launched in June. UBS has predicted Apple will sell 800,000 iPhones this year. The exclusive deal was a major coup for AT&T. Customers have had to sign multi-year contracts to buy an iPhone.

Apple is believed to be close to announcing similar exclusive deals in Europe ahead of the iPhone’s launch there. O2 is seen as the frontrunner in the UK, T-Mobil in Germany and Orange in France.

Hotz’s hack allows users to switch to AT&T rival T-Mobile’s network, the only other big US carrier compatible with the iPhone’s technology. At present the phone is available only in the US but the hack would mean Europeans could buy US phones to use on their networks and swap service providers to get round Apple’s exclusive deals.

But because the details of Hotz’s work are now public, Apple may be able to modify the iPhone to make its new phones invulnerable.

There is no US law against unlocking mobile phones.

Hotz is due to leave New Jersey for college this weekend. He plans to major in neuro-science at Rochester Institute of Technology.

Times Recommends

• Equitable Life halts £7bn sale on market turmoil
• Potential buyers emerge to save Woolworths staff
• Terrorist attacks close Bombay Stock Exchange