Following the news we brought you earlier today that T-Mobile had responded to Vodafone's attack on its sale of the iPhone in Germany, Reuters reports the official Apple partner-operator will now offer the iPhone without a contract.

T-Mobile has said it will offer the iPhone without the previously required 2-year contract for 999 euros, which works out as $1478 or about £720, at all its shops.

It will also be forced to allow those customers who bought an iPhone since November 19th to unlock the device free of charge so it can be used with other SIM cards.

However, and we're not sure how or why at this stage, Reuters is stating this will apparently not enable customers to make use of

all

the functions the device offers, although visual voicemail is logically the only function we could see that would not work on another SIM.

Before Vodafone stepped in and got the court order, customers had to sign up to a T-Mobile contract costing a minimum of 1176 euros in order to buy the 399 euro phone. In the UK, the iPhone is £269, with a minimum of 18-month contract with O2. An unlocked, or pre-pay version is not offered.

An industry insider we spoke to, said the iPhone business model had really has shaken up mobile phone operators and therefore they are working against Apple in attempt to prevent other handset manufacturers going down the same route.

"Everyone clearly wanted to get a piece of the Apple iPhone pie, and are trying to make things hard for Apple. A similar pre-pay offering is planned for the French launch, so the iPhone business model is not rolling out as smoothly as Apple would have liked", our insider said.

"It will be very interesting to see if Apple choose to go down the same route with the next-gen, or 3G iPhone, or if they will bow to consumer, and industry pressure and offer it as a standalone consumer electronics device."