iPhone Lawsuit Seeks Over $1 Billion in Damages

Lawyers filed a class action lawsuit against Apple and AT&T seeking $1.2 billion in damages because the iPhone is locked to AT&T's wireless network. The suit also notes that Apple will not allow unauthorized applications on the iPhone.

Filed on behalf of Paul Holman in the State of Washington and Lucy Rivello in California, the lawsuit explains that in the United States the SIM chip is locked to the wireless carrier, not the hardware device.

When Apple released the iPhone it tied the device to AT&T. Switching out the SIM with one from another carrier simply caused an error when the phone was rebooted. However, the cellular community quickly tackled the iPhone and found several ways to unlock the phone, allowing users to activate it using another carrier.

On September 24 Apple warned customers that unlocking the phone could render it inoperable when future software updates were applied. Three days later, an iPhone update was released that effectively bricked unlocked iPhones.

"Apple expressly designed its software release 1.1.1 expressly to disable Third Party Apps and to disable any unlocked SIM cards, and to create technical barriers to install new Third Party Apps or to unlock the SIM cards," the lawsuit reads.

The lawsuit also contends that Apple didn't discover that unlocking applications would harm the iPhone as it stated on September 24. Rather, the suit says that Apple engineered the software update to disable the phones on purpose.

"Version 1.1.1 was an upgrade with limited specific changes and improvements," the lawsuit reads.

According to the lawsuit Paul Holman purchased two iPhones and used third-party applications, as well as traveling abroad. Lucy Rivello said she wants to be able to use third-party apps and unlock her phone to switch to T-Mobile is she wants to.