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  (Source: Apple)

iPhone 3G  (Source: Apple)

iTunes App Store  (Source: Apple)

iPhone 3G 16GB in white  (Source: Apple)
Apple swings for the fences, again.

When it comes to announcing a new product, Apple knows how to set the stage and get people excited right up until the official announcement. Nowhere was this more obvious than with the launch of the original iPhone. The fervor surrounding the mobile handset didn't settle down when the first generation iPhone was announced in early January 2007 -- it continued until the eventual release of the phone in June of that year.

Speculation on the follow-up, the "3G iPhone", has been building ever since the first generation model was revealed -- but things really started getting a bit uproarious over the past few months. Case makers began leaking dimensions for the upcoming phone, supposed "leaked" pictures of the phone were drooled over by nearly ever gadget site on the web, and leaked firmware was picked over with a fine-tooth comb.

Apple today finally announced its next generation crowd pleaser. Apple is looking to address the shortcoming of its first effort this time around and further expand its popularity (Jobs previously stated that he wants 10 million iPhones sold within the first 18 months – it already surpassed the 6 million mark during its first year).

First things firsts – the worse kept secret about the second generation iPhone is its 3G capabilities. The first gen model was widely criticized for its slow EDGE cellular broadband capabilities. Apple is now matching the competition with the iPhone 3G. The iPhone 3G has tapered look with thinner edges, solid metal buttons, a black plastic backing, flush headphone jack [thank goodness], and vastly improved audio.

The faster cellular connectivity of the iPhone 3G allow for download speeds nearly as quick as WiFi and speeds that are 2.5 times as fast as EDGE. The iPhone 3G also sports better battery life than its predecessor. The iPhone 3G now supports 2G talk time of 10 hours, 3G talk time of 5 hours, 7 hours of video, 24 hours of audio, and 5-6 hours of high-speed web browsing.

Another big addition is fully integrated GPS tracking. IPhone 3G users can now get positioning information from WiFi, cell towers, and now the hardware GPS.

Apple also confirmed early speculation that price breaks would be in store for the new lineup of iPhones. The Cupertino, California-based company confirmed today that the new 8GB iPhone will be priced at $199 with a new two-year contract when it launches July 11, while the 16GB iPhone (which will be available in white at a later date) will set you back $299 under the same terms.

The iPhone 3G will be rolled out in 22 countries on July 11 (Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Mexico, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, UK and the U.S.).

Apple first announced the Software Developer Kit (SDK) for the iPhone in early March along with the 2.0 firmware update. The SDK allows third-party manufacturers to create their own applications for the iPhone and iPod touch and upload them to the new iTunes App Store.

Developers are charged a $99 fee to publish each application to the iTunes App Store -- Apple also takes a 30% cut of the purchase price for each application sold to customers to cover hosting and processing fees. For generous developers that provide their apps for free on the iTunes App Store, the aforementioned hosting and processing fees are dropped.

Jobs noted that applications that are less than 10MB in size will be downloadable through the cell network – applications larger than 10MB will have to be downloaded through a WiFi connection of through the desktop iTunes application. Automatic updates for applications will also be pushed through to the device.

A number of applications were on display that were developed using the SDK including SEGA’s Super Monkey Ball (which will be available for $9.99 from the iTunes App Store), an integrated eBay tool complete with bidding and search, and a news reader provided for free by the Associated Press. The latter tool will send local news to you based on your location, save images, video, and text for offline viewing, and even allow you submit news as it happens.

The 2.0 software -- which is available not only for the iPhone 3G, but also to the original iPhone and iPod touch -- adds a number of new features to make the devices more corporate friendly. These include push email/calendar/contacts between an iPhone/Mac/PC via MobileMe, auto-discovery, global address lookup, Cisco IPsec VPN, Certificates and Identities, WPA2/802.11x, and remote wipe.

Other features include contacts search, bulk delete/move for emails, a new scientific calculator, and the ability to save images to the Photo Library. Microsoft PowerPoint documents are now supported as well.

IPhone users will receive the 2.0 software update for free, while iPod touch users will have to pay $9.99. The update will be available next month.

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By vexingv on 6/9/2008 4:01:19 PM , Rating: 2
b/c the smartphone is still a relatively new market for the average consumers. apple needs to hook people now. this way they'll be iphone users for life and they'll be in a locked environment/platform. they might also see a rise in Mac hardware sales through a halo effect (think ipods). also, apple gets revenue sharing from the wireless carries and now its app store (but the app store may actually be a lost-leader model to push their hardware sales much like how the itunes store operates).

i have to say i bought a 3rd gen ipod and later bought a powerbook (but i had used Macs before at medical research labs). with the ipod i got to put my own mp3's and on OSX you can load whatever you want. but with the iphone and its app store, i'm a bit skeptical about it; i'd much prefer an open platform such as the one Google's Android is trying to accomplish. however, with no hardware available it's going to be a tough sell especially when you can get an iphone in a month for $200.

apple has essentially rattled the smartphone market. new smartphones are going to have to be priced much lower to compete. even then, at a lower price, the iphone's feature set is hard to beat.

By Pirks on 6/9/2008 4:51:59 PM , Rating: 2
apple needs to hook people now. this way they'll be iphone users for life and they'll be in a locked environment/platform
So why don't they hook people to Macs as well, by introducing additional cheap mass market oriented Mac models? My question is: why Apple decides to hook people on iPhone but refuses to do the same with Macs by extending their model line with cheap budget-oriented Macs?

By othercents on 6/9/2008 6:13:23 PM , Rating: 2
Simple... Apple won't be able to keep up with demand.

By michael2k on 6/9/2008 6:13:48 PM , Rating: 2
They ARE hooking people to Macs with cheap mass market Mac models. The iPhone!

The reason they don't make cheap "PCs" is because people only upgrade their PCs every several years while they upgrade their phones every couple years. Profit man, profit is the reason why they don't extend their Mac model lineup with a budget oriented Mac.

Unless you count the Mac mini as "budget oriented".

By kelmon on 6/10/2008 9:01:22 AM , Rating: 2
The real reason is that there's no money to be made in that sector of the market. Apple could take the risk that a budget model will attract non-Mac users in the hope that they'll buy a "high-end" Mac later but it's probably not worth it. Chances are that people who buy a budget machine now will continue to buy budget computers and, as noted at the start of this reply, there's no money to be made there.

Remember: market share is not important. What is important is profit and a high market share does not necessarily guarantee a maximum profit. Apple's a relatively small company and they're going to continue to focus on those high-margin markets so that they can maximise profits.

By fic2 on 6/10/2008 12:16:32 AM , Rating: 2
What I wonder about having to buy the apps from the Apple store is - if I get an iPhone now and a newer one in 2 years will I have to rebuy all the apps I use?

I would consider an iPhone if I had my choice of cell providers and if it was an open platform (not having to buy through the apple store - 30% for "hosting fees", please).

By psychobriggsy on 6/10/2008 7:59:45 AM , Rating: 2
If the applications are using Fairplay as the keynote suggested, I imagine that you can put an app on several devices, and also de-authorise your old iPhones and iPod Touches as and when they get replaced.

30% is a fair price for such a service with such a reach, especially as it covers all credit card processing fees, servers, hosting, free updates, bandwidth, etc. It also hosts free apps (no fee required), you can also ad-hoc supply applications outside the app store for 100 users, and there's also enterprise app distribution outside the app store.

"We don't know how to make a $500 computer that's not a piece of junk." -- Apple CEO Steve Jobs

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