An Apple software update is disabling iPhones that have been unlocked by owners who wanted to choose which mobile network to use.
Users may not be able to add Apple features to an unlocked phone
Earlier this week Apple said a planned update would leave the device "permanently inoperable".
Thousands of iPhone owners hacked their expensive gadget in order to unlock it for use with other mobile carriers and to run a host of unsupported programs.
There are also reports of the update causing issues with unaltered iPhones.
On Monday Apple issued a statement in which it said many of the unauthorised iPhone unlocking programs caused "irreparable damage" to the device's software.
The company said this would "likely result in the modified iPhone becoming permanently inoperable when a future Apple-supplied iPhone software update is installed".
That warning has now proved correct as many owners are reporting their phones no longer work following installation of the update.
Apple requires iPhone owners to take out a lengthy contract with AT&T in the United States but there are a number of programs on the net that unlock the device for use with other networks.
Some owners are reporting on technology blogs and Apple's own forums that the update is deleting contacts information, as well as photos and music, on iPhones that have not been modified in any way.