(UPDATE: Actually, they claim that their new application also restores the baseband of your iPhone if you used any of the free unlocks. The result: a bricked iPhone can now be fully brought to life and unlocked with their paid solution. People who already unlocked the iPhone with iPSF just need to jailbreak their iPhones and activate because, according to them: "there's no need to re-apply the unlock because the unlock survives the firmware upgrade. It's permanent." - Jesús Díaz) [iPhoneSIMFree]

We have successfully completed a test of the 1.1.1 firmware update on IPSF unlocked phones. We are very pleased to report that the phones are still fully unlocked, and if you are using an original activated AT&T sim, you can activate and use the phone with no issues at all. Unfortunately, currently there is no way to jailbreak/reactivate the phone for use with a sim card other than the original AT&T card. Therefore for our customers who have no immediate need to use alternate providers and are still using their AT&T card, you are welcome to update your phone. For the rest please be patient, as the jailbreak issue is something that affects much more than just the unlocking. The thousands of open source developers who have put a cumulative 10s of thousands of man hours into various apps and tools now have no way to get them onto the phone as well. We are all looking into the jailbreak issue as it affects us all, and we will keep updating our site as well as the open source community at large with any information we can about this.

We also tested an AnySim unlocked phone, and after the update it appeared to be relocked. The IMEI was reported as 004999010640000 (see below), and a T-Mobile sim was reported by the phone as an "Incorrect SIM" rather than the new "Different SIM Detected" message.

However, our recommendation still remains the same. Even if you could keep using your unlocked iPhone after updating, you can only use it with AT&T, which defeats the point of having an unlocked iPhone in the first place. Just don't upgrade. [iPhoneSIMFREE]

Unlocking the iPhone is important in principle, but unless you MUST HAVE RIGHT NOW, I'd advise that you wait a few days before plunking your cash down; iPhone Sim Free folks have been verified as legit but we don't know what will happen to the hacks when firmware version 1.03 comes out. (They aren't guaranteed as future proof.) At the firmware update, we'll be able to tell at least what Apple's will is toward the unlock, hostile or neutral.

Also, the $99 and $50 prices out there show that the market hasn't settled at all. I'm sure it'll go cheaper than $99 very soon, given the nature of competition. I'd say that an unlock that is future proofed is worth about $50. What do you think is a fair price?

Lastly, even though iPhone Dev Team won't reverse engineer the hack (according to good source within the iPhone Dev Team) out of respect, they will continue working hard to do this for free on their own. Can you wait for that to happen?

AUSTRALIA:
iPhoneWorldwideUnlock

GERMANY:
1digitalphone

SAUDI ARABIA:
iPhone4arab.com

USA:
Wireless Imports

[iPhone Sim Free]

First of all, the reason for the weeks of delay in getting video proof is because the IPSF team was busy not with the unlocking process—that was done weeks ago—but the business end. Because they're planning on selling to resellers for THEM to make businesses of, they had to finalize the database and all the backend stuff to manage licenses, etc. All very boring, and all stuff you guys don't want to hear about. Point is, they didn't delay this on purpose because they couldn't get the unlock working. Also, we're the first site to get permission to show the video unlock process. CNN and Engadget were not allowed to show video of the unlock process.

So sites who doubt that the IPSF team is real can finally relax. They're real. They're delivering.

The process is simple. The retailer you buy the unlock from will load the unlock software directly onto your phone, which will check to see if your IMEI is "allowed" to be unlocked. If it is, the software will unlock the phone—a process which took us approximately 2 or 3 minutes, as you can see in the video. The level of complexity is pretty much as low as you can get. Anyone will be able to do this.

In our case, the IPSF guys loaded the unlock application onto the phones via SSH. This is not how it will be done in the final version (you'll get yours loaded by the reseller), but it was quicker this way. Once loaded, the steps were exactly the same as the reseller final version (which they also sent to us, and works perfectly). Once run, a disclaimer comes up, you hit OK, and hit the unlock Apple image. It unlocks the phone, going through the process and displaying what the current activity is (as shown in the video). After unlocking, it cleans up, and you're done.

When we went through the unlock, we started with a T-Mobile SIM, which caused the iPhone to complain about a non-valid SIM. After the unlock was done, the error message was gone and it was able to connect properly to the T-Mobile network. Some of my babbling on camera is incoherent because I was on the phone with the IPSF guys while doing this, but I left the video intact (save for the last part where I cut to making a call) because I wanted to leave no doubts. And that red circle on the call app is the voicemail notification, which doesn't work correctly on T-Mobile (no visual voicemail).

The unlock itself is safe from restores, but requires that your phone is jailbreaked already, since you have to load a program onto the phone. And the app, since it runs directly on the phone, is stable. There should be almost zero chance to brick your phone, and most errors—if there are errors—can be fixed by restoring the phone and trying again.

That's what the final version of the software looks like.

IPSF definitely knows and built off of the iPhone Dev Team's work, insofar as none of this would be possible without the jailbreak. But as far as the actual unlock process, that's all theirs.

Where does this whole thing leave you? iPhone SIM Free is sending out this software to resellers and third-party unlockers starting today, which means you can get yours unlocked very, very soon. As for the iPhone Dev Team, we're still waiting on their free implementation.

One last thing. Five lucky Gizmodo readers are getting a free unlock courtesy of the iPhoneSIMFree team. Check back next week for details.

With additional reporting by Jesus Diaz

iPhone Sim Free