A US teenager has hacked Apple’s iconic iPhone so that it can be used on another network.

The bad news for anyone interested in doing this is that it takes over two hours and requires a soldering iron to be taken to the device.

After spending his entire summer break hacking the phone, 17 year old George Hotz traded the unlocked device over the weekend, prior to him leaving for college. Hotz managed to grab a Nissan 350Z and three 8GB iPhones for his efforts.

He broadcast the hack live on the web and succeeded in getting the device to make calls on T-Mobile USA’s network. The only feature that doesn’t work is the Visual Voicemail service because the servers for this are on AT&T’s network.

Hotz said his next project is a GPS for the iPhone that uses triangulation from cell phone towers.

Also over the weekend, another group of hackers unveiled a software toolkit called iPhoneSIMFree, which they claim to be the world’s first software only unlock for the device. These guys have not yet made the software public, it seems they are trying to build up some publicity for it first, because they plan to sell the toolkit online.

Hotz has offered to verify the software hack on his blog but has not yet been taken up on the offer by iPhoneSIMFree.

Meanwhile, another group, known as UniquePhones, also claimed to be prepared to release software to unlock the iPhone over the weekend. But a posting on the organisation’s blog said that the company received a telephone call from a Menlo Park, California, law firm at 3am, acting on behalf of AT&T. So the software release has been delayed indefinitely.