The Norwegian cracker initially made a name for himself eight years ago when he cracked the encryption code on DVDs. And last year, he cracked the digital rights management code that prevents iPod users from playing songs purchased from competing online music stores.

In his latest effort, DVD Jon has detailed a Windows workaround that he claimed will allow the iPhone to be used as a widescreen iPod and Internet communicator. The cracked iPhone cannot be used to make calls.

"I've found a way to activate a brand new unactivated iPhone without giving any of your money or personal information to AT&T," Johansen wrote on his "So sue me" blog. "The iPhone does not have phone capability, but the iPod and Wi-Fi work."

Foiled Again!

DVD Jon offered a link to download the patch. Dubbed "Phone Activation Server v1.0," the patch requires users to have Microsoft .NET 2.0, which is freely available as a download from Microsoft.

Those commenting on Johansen's "So sue me" blog said they were duly impressed with his cracking abilities. Some expressed hope for a Mac version. Others wanted to know whether they could use the patch to activate an inactive iPhone now and still be allowed to activate it with AT&T later.

A poster named "Jon (not the author of the blog)," shared another way to activate the iPhone surreptitiously. "If you know someone who has already activated their iPhone, borrow their SIM. Insert the SIM in the nonactivated iPhone. Then cradle the new iPhone in the dock with iTunes," he wrote on the "So sue me" blog.

The promised result? Apple's iTunes quickly activates the new phone with AT&T. In this scenario, the iPhone requests to be activated even though the account is already active. This seems to be a way to get two phones activated for the price of one, but this second Jon said he is uncertain as to whether the first device would lose its activation.

The sentiment among the cracking community is that it won't be long before iPhone users can port their service over to their carrier of choice, effectively leaving AT&T out of the loop despite a five-year exclusive contract with Apple.

What's Next?

With so much attention drawn to the iPhone, analysts are not surprised that such stories are quickly emerging. "There is an opportunity for people to do proof of concepts, not for viruses necessarily, but to show security weaknesses or things that could be exploited for whatever means," said Ken Dunham, senior engineer and director of the rapid response team at VeriSign iDefense.

Dunham said he doesn't expect DVD Jon's escapades to do much damage to the iPhone's chances for success, or even to AT&T's contracts. He predicted that people will figure out how to port the iPhone to another service, but noted that most will continue to use AT&T.

What hacks like this do, though, is erode consumer confidence, he explained. "Consumers didn't think much about security in the past, but today what we see is that consumers are thinking about security frequently," he said. "They just aren't sure what to do about it."