The iPhone has presented a challenge to the hacker community, set on unlocking the handset and installing third-party applications on the device, and the hackers appear to be winning.

Following the launch many felt confident that they would be able to break into the device within a week. However, months later the goal of installing third-party programs on the iPhone has only just been achieved.

Thanks to a utility called, hackers have achieved command-line access to its inner workings and managed to install third-party programs on Apple’s iPhone. Once the utility is installed it allows the iPhone to download and install third party applications via its WiFi or EDGE connection.

Another utility, this time from iPHUC, also claims to offer simple terminal access to the phone. The software makes it possible to open a UNIX prompt on a Mac and manually send files, run scripts, or change the functionality of the iPhone by hand.

Also available is the Turbo SIM hack, which makes it possible to unlock the iPhone handset – the hack enables all but EDGE data support on the phone.

It is probably only a matter of time before Apple will update iPhone software to make such hacks impossible, unless the phone software is restored to an earlier version, reports MacNN.