Ending months of speculation and rumor, that the first major revision to the iPhone, dubbed , will ship on 11-Jul-08 for $199 (8 GB) or $299 (16 GB). The iPhone 2.0 software, which will be a free upgrade for all current iPhone owners, will also debut on that date. iPod touch owners will be able to upgrade to the new software for $9.95.
The iPhone 3G will launch initially in 22 countries, with Apple aiming for availability in more than 70 countries by the end of 2008. To illustrate the complexity in such a device, Apple said in a briefing that the iPhone 3G has 10 radios, 7 of them covering the various spectrum slices used around the world.
New Hardware -- As you might expect from the name, the iPhone 3G supports third-generation cellular data networking that operates over eight times faster than the EDGE data support in the first iPhone model. Apple claims just a factor of 2 to 3 times faster Web-page loading and email-attachment downloading. AT&T's flavor of 3G also makes it possible to use data-based services while you're talking on the phone.
The iPhone 3G's enhanced networking capabilities don't come at the expense of previous capabilities, and the device can switch among 3G, EDGE, and Wi-Fi as needed. The iPhone 3G can be set to use only 2G networks when that's necessary, which might be the case in reducing roaming charges outside of one's home carrier network.
The other major hardware enhancement in the iPhone 3G is a GPS receiver, which enhances the current iPhone's cell tower triangulation and nearby Wi-Fi network sniffing to provide more accurate position and real-time location mapping and tracking over time. In the keynote, Jobs demonstrated a drive the company "recorded" down San Francisco's famous curvy Lombard Street, with the Maps application playing back the progress over the same time duration, pulsating a ring of blue as a blue dot moved.
A GPS receiver can drain power from a mobile device quite rapidly - that's why they're often used while plugged in to an automobile. But in a briefing, Apple explained that the GPS receiver was engaged only while Maps was active, or when a program that called on Core Location features in the iPhone 2.0 software was using the GPS. The iPhone will ask your permission before allowing an application to use the location hardware, too.
It remains to be seen if Apple or another developer will add spoken directions. Technically speaking, the iPhone 3G supports, or A-GPS, which increases accuracy and improves performance by offloading some processing to a remote server. The GPS capabilities also enable photo geotagging, although the iPhone's built-in camera remains stuck at a mere 2 megapixels.
Less sexy but equally useful is the iPhone 3G's improved battery life in standby and talk time. Apple provides the following estimates, although our experience with all vendor battery life estimates is that they're optimistic and seldom reflect real-world usage (since, for instance, you would likely perform a variety of these actions over the course of a normal day of iPhone usage).
The iPhone 3G uses 3G for talk when connected to 3G networks, and that reduces talk time by half, as you can see. With a switch in Settings, you can force the iPhone to use 2G networks to extend talk time or reduce data roaming bills when you're roaming away from home.
Physically, the iPhone 3G is almost identical to the original iPhone. shows it increasing in depth by .02 inches (.7 mm) and decreasing in weight by .1 ounces (2 grams), not something we can imagine anyone but a dock manufacturer noticing or caring about.
TidBITS editor Glenn Fleishman spent a few minutes with an iPhone 3G during an Apple briefing, and found that despite the tiny changes in weight and size that it was noticeably lighter - he compared by holding his 2G iPhone in one hand and an iPhone 3G in the other - and nicer to hold.
However, the original iPhone's easily scratched chrome back has been replaced with plastic - black by default, although there's an option for white in the 16 GB model. And the headphone jack is now flush with the case, something that garnered big applause from the WWDC audience. (The original model's recessed jack meant some third-party headsets wouldn't fit without use of an adapter.) Jobs claimed that the iPhone 3G also boasts dramatically better audio quality thanks to better built-in speakers.
iPhone 2.0 Software -- Current iPhone and iPod touch owners won't have to buy an iPhone 3G to take advantage of other new features, however, since the iPhone 2.0 software that drives the iPhone 3G is . The iPhone 2.0 software will enable users to move and delete multiple email messages at once, search for contacts, use  (merely by flipping the iPhone to landscape orientation when displaying the current calculator), turn on parental controls to restrict specified content, and save images directly from a Web page or send them to your iPhone via email (from which they can then be transferred back to the Mac).
Some users will particularly appreciate the capability to view (but not edit) email-attached documents from the iWork suite within the Mail program: Keynote, Pages, and Numbers, along with Microsoft PowerPoint (joining the existing support for Word and Excel documents). And, finally, the iPhone's Calendar app, instead of grouping every event into one calendar.
There's a subtle change that Apple discussed in a briefing when asked about the ability to enable Wi-Fi and disable cell radios in aircraft, since many airlines in the United States will be launching on-board Internet access using Wi-Fi in the next few months. An existing Airplane Mode in Settings turns off all radios when enabled; Apple said that the iPhone 2.0 software would allow Wi-Fi to be switched back on after Airplane Mode was engaged. This would also let you extend battery life by disabling 9 of the 10 on-board radios if you didn't need voice calling. (Although cell radios are illegal to use in flight in the U.S. and many other countries - with a lot of provisos about the word "illegal" - GPS receivers can be used if an airline or pilot permits it. Joe Mehaffey.)
Of course, we anticipate that the most interesting applications will come from third-party developers who have now been using the iPhone SDK (software development kit) for three months to create a wide range of programs. 250,000 people downloaded the free iPhone SDK, and 25,000 applied for the paid developer program, but only 4,000 have been admitted to the developer program so far.
During the WWDC keynote, Apple brought a number of developers on stage to show their applications and make the expected platitudes about how wonderful it was to develop for the iPhone. Sega, Pangea Software, and Digital Legends Entertainment showed off games that took advantage of the built-in accelerometer and gestures; eBay demoed a native application for bidding in auctions; two companies presented medical applications; the Associated Press and MLB.com showed news-related programs; and the social-networking site Loopt used the iPhone 3G's location capabilities to show the location of your friends. The developer who garnered the most applause, however, was a lone developer named Mark Terry from Moo Cow Music, whose Band program lets iPhone users mix songs using a variety of instruments.
All iPhone applications, free or commercial, will be available via; see " " (2008-06-09) for more.
Pricing and Availability -- Jobs acknowledged that one of the major challenges Apple faced with the original iPhone was the price, which started out at $599 for an 8 GB model. The first price cut dropped that to $399 (see the details at the end of " ," 2007-09-10), and Apple has now reduced the price yet again, cutting it in half to $199 in the United States, and he said it would cost the same or less worldwide. That's for a black 8 GB model; for 16 GB of RAM, you'll pay $299, and you'll get the choice of a black or white back.
Although it's hard to argue with Apple dropping the iPhone's price by $200, a fact that came out only after the keynote is that 3G service plans will increase by $10 per month for personal plans, and $25 per month for business plans. That makes the cheapest package $70 per month. Historically, Apple has received a share of revenue, but that the revenue-sharing deal hasn't been extended to the new model, along with the fact that current iPhone users who want to upgrade will be able to do so by starting a new 2-year contract, not adding another 2 years on top of the remaining contract commitment. Instead of the revenue sharing deal, , according to the Associated Press, a standard cellular-phone pricing arrangement.
(Don't cry for AT&T: with the cheapest personal service plan, they'll realize about $500 more in revenue over two years with the higher fee and no revenue sharing than they did with the 2G iPhone.)
The iPhone 3G will be available in 22 countries on 11-Jul-08. Interestingly, the online Apple Store is not accepting pre-orders; it merely where the iPhone will be available.
What's Next? This product announcement was perhaps the least-well-kept of Apple's secrets since Steve Jobs returned to the company many years ago. Both the 3G and GPS additions have been discussed for ages, and Apple itself raised the curtain on the iPhone SDK and App Store months ago. So in some sense, despite the massive amount of anticipation, there's a slight letdown in not being wowed by entirely unanticipated features or in Apple not delivering on every rumored feature, such as a forward-facing video camera for iChat video chatting. (Damn those rumors for raising our hopes!) That does leave room for a third-generation iPhone to appear next year, though who knows what Apple will call it, given that the second-generation is the iPhone 3G.
[Note: This article was updated on 10-Jun-08 to correct a mistake about GPS receivers. Individual airlines, not federal authorities in any country we're aware of, allow or ban the use of GPS receivers on board aircraft.]