1:00 PM -- T-Mobile International AG bowed to Vodafone Germany 's legal threat and agreed to temporarily sell unlocked iPhones in Germany. Now, T-Mobile offers a contract-free iPhone for a whopping €999 ($1,500). T-Mobile is also required to unlock any iPhones sold after November 19 for free. (See VOD Spoils iPhone Fun.)

While the unlocked iPhones can be used on any mobile network, users will not have access to all of the bells and whistles available on T-Mobile's contract plan.

Vodafone served T-Mobile with a temporary injunction on Monday to stop selling the iPhones. A T-Mobile spokesman said that offering an unlocked version of the famous phone was the least worst option the operator had to comply with the injunction.

T-Mobile has appealed the injunction. A regional court in Hamburg will decide whether it is indeed legal under German law to sell locked iPhones. A T-Mobile spokesman says the court case will start in the next two weeks.

— Michelle Donegan, European Editor, Unstrung