The court has temporarily prohibited T-Mobile Deutschland GmbH from continuing to sell the iPhone only in combination with a two-year service contract. The court also demanded that the product be allowed to function on other cellphone networks, and not just T-Mobile’s.

To be in compliance with a court ruling, Deutsche Telekom announced today that they will immediately start selling an unlocked iPhone without contract for 999 euro (US $1,477). The iPhone will still be sold, as before, with 2 year contract for 399 euro ($US $590).

Bloomberg reports that customers who purchased the iPhone in Germany after November 19th may have their iPhone unlocked for free. Existing German iPhone customers can reportedly also receive the unlock for a fee.

Prior to this, the only unlocked iPhones in existence have been “hacked” with 3rd party applications. This introduces legitimate unlocked iPhones into the marketplace that will presumably withstand future iPhone software updates.

Source: http://www.macrumors.com/2007/11/21/t-mobile-selling-unlocked-iphones-in-germany