Apple Inc. can’t seem to stay out of the news—whether its speculation about ever evolving products every quarter, complete with Photoshopped product images and investment banker speculation, or buzz about the Jobs turtleneck trend, not a week passed this summer without Apple thrust into the spotlight and its stock price riding accordingly.

This week is no different, except the recent maelstrom of publicity is arguably the biggest news to hit since the iPhone debuted on the 29^th of June. Appropriately enough, the star of the controversy is the iPhone, again. On August 24^th, nearly 2 months following the U.S. release of the highly publicized and clamored for iPhone, George Hotz, a 17 year old New Jersey native, hacked the phone and brought the standing 5-year exclusivity agreement between Apple and AT&T to its knees.

Hotz, a star engineering high school student who starts his first week of college this week, at the Rochester Institute of Technology, initially planned to hack the iPhone’s exclusivity because his own family plan was with T Mobile, and his mother refused to switch because of the termination fees she would have to pay. Hotz vowed to spend the summer figuring out how to unlock the iPhone, and he reached his goal, some 500 hours later.

Hotz posted a full list of instructions, in 10 steps, on his personal blog, for the world to view free of charge. He then proceeded to list his personal hacked iPhone on eBay, where the “piece of phone history,” as he termed it in an interview with Fox News, climbed into the millions before being pulled for fraudulent bidding. He resolved the matter through his website, where he settled for a trade; his iPhone for “a sweet Nissan 350Z” and 2 eight gigabyte iPhones.

Hotz’ instant fame is not the issue, however, nor is the ridiculously uneven trade that he managed to execute. The issue is the hack of Apple Inc’s revolutionary iPhone, the very same phone that caused a critical tizzy when it was announced that buyers would be limited, with contractual exclusivity, to buying 2 year contracts from AT&T if they wanted to use their magical device for anything other than a tricked-out $600 mp3 player.

When Apple announced their 5 year exclusive agreement with AT&T, US wireless telecommunications carriers took a hit, particularly in the area of publicity and appeal. The innovation and sheer gimmicky shock value tied to the iPhone made it a huge winner for AT&T and caused all the competition to scramble to figure out new ways to reel in potential customers.

Now, anybody (provided they are using a GSM carrier, which Verizon and Sprint are not) can use an iPhone. Parents of begging teenagers galore won’t worry about termination fees from their T-Mobile family plans, for one. This is both a boon and a worry for Apple, as its new broader usage capability will push unit sales much higher. We are already seeing some of this, as Apple’s stock price rose $4.23 after the news of the hack broke.

On the other hand, though, as Apple goes through negotiations with international wireless giants, hoping to recreate lucrative agreements similar to the one signed with AT&T, their negotiating ability is severely hindered by the fact that they can no longer guarantee exclusivity. So why Vodafone would want to shell out trillions of dollars to enter into a contract would become more of an issue than it was before George Hotz came into the picture.

Needless to say, a lot of people won’t be going through the fairly complicated unlock process that Hotz published on his website (involving a soldering gun). However, the same day as Hotz publicized his findings, Engadget, a popular tech blog, published news of another hacker group, iPhonesimfree, successfully hacking their iPhones using a software procedure only (lessening the complexity of the process and taking away all threat of soldering your fingers to your hardware.) Just two days later, an Israeli team of hackers submitted their own trick to the web, in which they made their phone work on an Israeli mobile carrier’s network with no troubles.

These hacks will keep pouring in. Some will charge money to be used, others, like Hotz’, will be free. Altogether though, they have the power to bring agreements previously projected as being profitable down to no foreseeable benefit. It is amusing, and a little bit discomforting, to think that a huge corporation could blinkered by a 17-year-old nerd.

Maya Grinberg