iPhone 2.0 debuts with faster 3G wireless and a built-in GPS system — and a $199 price tag for the 8GB model. Video? Flash? Javascript? Ask later, but third-party apps also debut on July 11. [Updated]

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

TechCrunch, but this news will be everywhere:

Apple announced its new 3G iPhone today. It is much thinner, much faster, and much cheaper than its predecessor. Starting at $199, you get an 8 gigabyte device with GPS that works on AT&T’s high-speed 3G network (as opposed to the slower EDGE network all previous iPhones are bound to). A 16 gigabyte version will go for $299. Considering that the current 8 GB iPhones cost $399, that is quite a steal. The battery is supposed to support 300 hours of standby time, 5 to 6 hours of Web browsing, 7 hours of video, and 24 hours of audio. But talk time is cut in half from 10 hours to 5 hours, when using the 3G network. The launch date is July 11.

The New York Times:

The biggest news from Apple is what Steve Jobs didn’t say: It has completely changed the basis of its deals with AT&T and other wireless carriers.

According to a press release from AT&T, the carrier will no longer give a portion of monthly usage fees to Apple. Instead carriers will pay Apple a subsidy for each phone sold, in order to bring the price from $399 down to $199 for the 8 Gigabyte model. The company did not specify the amount of the subsidy. Subsidies of $200 to $300 are common in the industry.

What is more, consumers will now pay $30 a month for unlimited data service from AT&T, compared to $20 under the plan introduced last year. So even though the phone will now cost $200, consumers will be out more cash at the end of a two-year contract compared to the previous deal.

Of course, that includes faster 3G data service, so the price increase may be worth it. But we should call it an iPhone price increase, not a cut.

Unlimited data service for business users will cost $45 a month.

[….]

AT&T also said in its release that it now has 3G data service in 280 metropolitan areas, and that will increase to 350 areas by the end of the year.

For Apple, this move to getting all its money up front has several advantages. By using the same economic model as every other cell phone maker, it makes it easier to bring the phone to carriers in every corner of the world.

It also should help insulate Apple from the cost of people who buy iPhones and unlock them to use on carriers that don’t pay Apple the monthly fee. Now Apple will get its money, say $500, up front and it no longer has to police what people do with them. Whether Apple will still keep penalizing users who unlock their phones is one of the many questions that remain to be answered.

More: Newsweek, fingered by Richard Riccelli:

But though the low price will dominate iPhone chatter between now and July 11, there is actually a much bigger iPhone story to tell. Today marked the official transformation of Jobs’s original vision of the iPhone—from a world-beating product to a contender for the first big operating system of the 21st century. Much of Jobs’s keynote consisted of demos of some of the hundreds of applications that either will ship with the new iPhone or will be available in the new iPhone App Store (which sells apps in the same manner that the iTunes store sells songs and videos).

Jobs took pains to trumpet, before this audience of software developers, how easy it was to create applications for the iPhone that take advantage of its built-in features like motion sensors, multitouch control, maps, and voice technology (since this is a phone, too). He even unveiled a scheme whereby people could distribute miniapplications to small groups (like a teacher creating an app for his or her classes).

All of this represents a drastic shift from Jobs’s original contention that the iPhone would be a fairly closed system, even though it used the same operating system as the Macintosh. In an interview after the January 2007 announcement of the iPhone, Jobs said that we shouldn’t think of the device as a general-purpose computer, but more like an iPod, which runs very few applications mostly written by Apple.

That’s changed, big time. After a tense period of struggle in which Apple tried to get that message across to iPhone users, Jobs and his team have now embraced what seems to be a much more exciting prospect: iPhone as the leading launch pad for cool and productive mobile applications. It’s clear now that the computer that we use as a phone is the digital device that will dominate our lives in the future, and Jobs—who has the best gadget on the market—sees an opportunity to take on competitors like Nokia, Microsoft RIM and Google in a war of the smart phones.

Is it possible for Apple or anyone else to rule in the mobile realm the way Microsoft did on the desktop? The way to do this is to go mass-market with a device that can do anything the others can do. That’s why Apple is creating business-oriented apps like exchange-style mail, starting its own new mobile-oriented cloud-computing service (MobileMe), and encouraging everyone to write new applications.

A quarter-million developers have downloaded the iPhone SDK since Apple made it available barely three months ago. Apple has also made massive efforts to make the iPhone a worldwide phenomenon. As I’m typing this my inbox is filling up, spam-style, with press releases announcing arrangements with carriers in different nations. Orange in France, SingTel in Singapore, O2 in the U.K., Hutchison in Hong Kong and Macau, Vodaphone in Australia, Italy, South Africa, Turkey, Greece, India, New Zealand and the Czech Republic … and so on. All while making sure that no one in the world has to pay more than $200 to get an iPhone.

The Macintosh, the computer Jobs introduced in 1984, was a technological breakthrough that never became the worldwide standard he believed it should have been. Today begins his effort to make the iPhone a mobile device not for the rest of us, but for most of us.

More: Engadget, The Unofficial Apple Weblog.

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