One-Fourth of iPhones Hacked to Bypass AT&T

iPhone users apparently aren't worried about "bricked" phones: Over one-fourth of Apple iPhones have been unlocked to run on wireless networks other than AT&T's, according to a Reuters report.

One of the first and most popular hacks on the iPhone was "unlocking," which lets iPhone users bypass AT&T's service and use the phone on other carriers' networks or on WiFi. Apple executives had warned that an unlocked phone could be damaged and may not operate with iPhone software updates. (See Apple: Bypassing AT&T Can Break Your iPhone.)

Toni Sacconaghi, an analyst with Bernstein Research, said 1.45 million iPhones were "missing in action" at the end of last year -- 480,000 of which were likely inventory at AT&T, and the other 1 million unlocked, according to the Reuters report. Last week, Apple executives admitted there were a "significant" number of unlocked iPhones, but declined to comment on Bernstein Research's new analysis of the issue, according to the report.

The analyst said this has both financial and strategic ramifications for Apple, which gets a percentage of AT&T's service fees for the iPhone. And there are tradeoffs for Apple if it more aggressively enforces the exclusive service for unlocked iPhones, Sacconaghi noted.

— Kelly Jackson Higgins, Senior Editor, Dark Reading