• by Wendy Davis , Staff Writer @wendyndavis, January 29, 2008

When Apple launched the iPhone in June, the sole wireless carrier in the United States was AT&T -- a drawback to many who wanted to use the device with other telecoms.

So it wasn't surprising that people found ways to unlock the phones, making them compatible with other networks. One of the most famous unlockers, Jon Lech Johansen, known as "DVD Jon" for his earlier efforts defeating DVD copying restrictions, posted a workaround on his blog July 3 -- just days after the iPhone's release.

Now, it looks as if somewhere around 1 million phones have been unlocked without authorization. Of the 3.7 million sold by Apple, only 2 million have been activated by AT&T. The wireless company is believed to hold around half a million, but that still leaves more than 1 million phones missing.

The speculation is that many of those phones were bought for resale on the black market and are now in use in countries where Apple doesn't have an agreement with a wireless carrier. Business Week argues that this scenario isn't necessarily bad news for Apple. "In countries where the iPhone isn't yet legally available, unlocked devices may function as part of the company's hype machine. Every time someone flies home with an armful of iPhones purchased at a local shop or online, it revs up awareness of Apple's brand," the magazine writes.

Of course, there might not be much choice but to look on the bright side, as Apple hasn't been effective in stopping hackers. In October, the company unleashed an update that rendered phones that had been tampered with useless. But new software quickly surfaced allowing users to restore their iPhones to their pre-update settings.

Perhaps Apple could escalate the software battle, but it seems inevitable that more workarounds would follow. In the meantime, it would make sense for the company to focus on forging new wireless deals that will result in more choices for consumers.