The New York Times reports that security firm Independent Security Evaluators has discovered the first flaw in iPhone's security.

Independent Security Evaluators's principal security expert and ex-NSA agent Dr. Charles A. Miller says

Once you did manage to find a hole, you were in complete control.

According to NYT's John Schwartz:

the site injected a bit of code into the iPhone that then took over the phone. The phone promptly followed instructions to transmit a set of files to the attacking computer that included recent text messages -- including one that had been sent to the reporter's cellphone moments before -- as well as telephone contacts and e-mail addresses

Meanwhile here is a video of a 1 yr using iPhone.