A New Jersey teenager has unlocked the iPhone, opening the way to Apple's iconic mobile telephone being used by non-US networks.
The Associated Press news agency confirmed George Hotz, 17, had unlocked the iPhone and used it on T-Mobile, a rival to its sole US operator, AT&T.
The hacker says the unlocking takes about two hours and involves some soldering and skill with software.
AT&T and Apple have not yet commented on the news.
Hackers and security researchers have been poring over Apple's much-coveted phone since its launch in the US in June in an effort to discover vulnerabilities in the handset.
Top of their list has been cracking the code that ties the phone to AT&T, the iPhone's exclusive network.
Before George Hotz's announcement on his blog, the iPhone was made to work on overseas networks using another method, which involves copying information from the Sim (Subscriber Identity Module) card.
However, special equipment was needed and the actual phone was not unlocked, with each Sim card having to be reprogrammed for use on a particular iPhone.
Analysts believe Apple may still have time to modify the iPhone production line to make new phones invulnerable to the hacks before the iPhone's expected European launch later this year.
The young hacker says he hopes phone-owners can eventually unlock their phones by themselves, and that he hopes his discovery will not be exploited for commercial gain.
The iPhone is currently sold only within the US
"That's exactly, like, what I don't want... people making money off this," he told AP.
The next step, he said, would be a non-solder solution: a way to unlock the phone using software alone.
Technology blog Engadget said on Friday that it had successfully unlocked an iPhone using a different method that required no tinkering with the hardware. The software was supplied by an anonymous group of hackers that apparently plans to charge for it, AP reports.
The agency notes that both the Hotz and Sim techniques leave the iPhone's many functions intact apart from its "visual voicemail" feature, which shows voice messages as if they are incoming e-mail.
The New Jersey hacker says he collaborated online with four other people, two of them in Russia, to develop the unlocking process.
He spent about 500 hours on the project since the launch on 29 June.
"Some of my friends think I wasted my summer but I think it was worth it," he told US newspaper The Record of Bergen County.