The modem firmware on the iPhone 3G has been successfully downgraded by the iPhone Dev Team: a clearing of the first hurdle in completely hacking the iPhone 3G modem baseband. A post to the team's blog reads:
"This image is the 'About' screen from a 3G iPhone that was bought in a store last week. As you can see the modem firmware version has been successfully downgraded to an older 'beta' firmware. This is not an unlock (yet), but it is our illustration of the first progress made with regard to hacking the 3G baseband. We have accomplished this by being able to execute our own code on the baseband that allows us to circumvent security checks and flash the baseband with older, disallowed firmware. Please note this has been accomplished using software only, the iPhone 3G has not been disassembled or hardware modified in any way."
Here's how this accomplishment is a move towaard creating a version of the modem firmware that would allow the iPhone 3G to run on non-sanctioned carriers: The iPhone is a essentially a system with a a GSM modem attached. The system has the iPhone OS and the modem carries the baseband. As such, a viable unlock would contain two components: hackers need to exploit the OS, finding a method to both activate and jailbreak the the device, gaining access to the iPhone OS and its filesystem with read/write access. After a successful jailbreak and activation, iPhone can be used, essentially, as an iPod touch since none of the cellular functionality is intact.
The second step is to hack the baseband for the modem, allowing users to make and receive phone calls with various SIM cards.
Together, these accomplishments would allow usage of the iPhone with carriers of choice. However, such an achievement would be of less importance with the iPhone 3G relative to the first-generation iPhone.
In the case of first-generation phones, Apple used a technical tack to thwart unlockers. Each successive firmware revision for the devices included revisions that undid or nullified extant unlock methods. The hacker community dutifully responded, however, in some cases unlocking new firmware revisions before Apple had a chance to release the updates to the general public. Eventually the unlock process was refined to a single-click mechanism that worked with all iPhone firmware revisions.
In the case of the iPhone 3G, the hurdles for unlockers are of a wholly different nature. In addition to the aforementioned contractual roadblock, unlockers face more serious foes: supply and demand. Apple plans to make the iPhone 3G available in over 70 countries in the next few months, largely eliminating the need for unlocked devices in those markets. While some users will undoubtedly still desire unlocked devices for their ability to utilize different carriers in different countries at reduced voice and data expense, the insatiable demand for contract-free phones will be no more.
There's another reason unlocked iPhone 3Gs will be prove less desirable, at least in the US. T-Mobile, which has seen a flood of unlocked, first-generation iPhones move to its network, uses a one-of-a-kind 3G spectrum that (upon initial analysis) will not be compatible with the iPhone 3G. That means an iPhone 3G might be able to work on T-Mobile?s slower data networks but not take advantage of the faster data rates afforded by other carriers.
The iPhone 3G is already being sold as an unlocked device by 3 Hutchnison Telecommunications in Hong Kong and TIM in Italy. This means that users can insert any carrier's SIM card into the device and access the attached network. However, both carriers are still requiring users to sign a two-year contract before they purchase the unlocked iPhones.