SCI - TECH : CHEAPER i-PHONE

Apple CEO Steve Jobs gave the Apple faithful and the business community what they wanted Monday: a faster and much cheaper iPhone.

The new models will feature GPS satellite-tracking chips, third-generation (3G) cellular Internet access, better audio, longer battery life, metal buttons and a regular flush headphone jack.

The 8-gigabyte model will retail for $199 in the U.S., its 16-gigabyte sister for $299 — and the latter variation will also come in white.

It hits stores on July 11 in the U.S. and 21 other countries, including Canada, Mexico, Australia, New Zealand, Japan, Hong Kong and most of western Europe.

Third-generation Internet connectivity is crucial to the iPhone's success in Europe, Japan and Korea, where cheaper phones have had the feature for years.

It'll be like "going from dial-up to broadband" for iPhone users, Piper Jaffray analyst Gene Munster told USA Today in an article published Monday before Jobs' speech.

Admission of defeat

The price cut was in a way an admission of defeat for Apple. It had tried to buck the U.S. cellular-market model of discounted handsets heavily subsidized by the carriers, which make back the money on service charges and add-ons.

It was a "tacit acknowledgement ... that its previous sales strategy was not sustainable," the Financial Times said Friday in a story breaking the news of the price cut.

For the past year, Apple charged users full price for the iPhone, initially $499, and then $399 for a higher-capacity unit.

The trade-off was that AT&T offered relatively inexpensive voice and data plans to go with it.

And indeed, Jobs neglected to mention one little thing during his speech Monday -- AT&T's iPhone plans would be going up, with the base voice and unlimited data monthly plans starting at $70, up from $60.

Apple aims to sell 10 million iPhones worldwide by the end of 2008; it's sold only about 6 million since the device went on sale in the U.S. nearly a year ago.

That goal will be aided somewhat by a rapid overseas rollout.

By the end of the year, the iPhone 3G will be available in 70 countries, including almost all of Latin America, South Africa, Kenya, several West African countries, Egypt, Turkey, India and the Philippines.

Noticeably absent on the big iPhone map of the world behind Jobs during his announcement were two of the iPhone's biggest "gray markets" — China and Russia.

Both countries are full of iPhones bought elsewhere and "jailbroken" to work on networks other than the ones they were hard-wired for.

Dependable showmanship

Jobs, looking noticeably thinner than usual, bounded onto the stage of the Moscone Center in San Francisco just after 10 a.m. PDT Monday morning.

The online Apple Store had gone "dark" worldwide a few hours earlier, with variations on "We'll be back soon" greeting potential customers.

That wasn't news to anyone wanting an iPhone — Apple stores, both online and offline, ran out of the old-model devices more than six weeks ago.

Jobs began his keynote address at the start of the tech firm's Worldwide Developers Conference by listing the number of companies that had tried out the iPhone's enterprise software.

Apple hopes to take a big chunk of the giant, lucrative corporate smartphone market with the iPhone.

Right now, Research in Motion's BlackBerry devices dominate that market the way Apple's iPods dominate the MP3 player market — there simply isn't any worthy competition.

According to Jobs, 35 percent of Fortune 500 companies had tested the software, as had the U.S. Army.

After a jargon-heavy presentation detailing the technical achievements of Apple's software development kit for the iPhone, a brand new batch of third-party applications were debuted.

Several games, including Sega's "Super Monkey Ball," that used the iPhone's own motion sensor to substitute for a four-way joystick, were demonstrated.

"These graphics look unbelievable compared to anything we've seen on a cellphone before," commented Engadget's Ryan Block on his Web site's live event blog. "Seriously, these are [Nintendo] DS-quality graphics, easily."

Other applications were shown off — one that keeps track of your iPhone-toting friends in your general vicinity, another that updates baseball scores, a third specifically to bid and post on eBay, a musical-instrument emulator, a medical guide and even a mobile blogging application.

Existing third-party applications have to be downloaded via a PC or Mac from the Apple Web site, and all are free, but the new AppStore connects directly to iPhones wirelessly — and most of the applications will carry a purchase price.

A decade after "push" software briefly became the Next Big Internet Thing, and the next Internet bust, Jobs introduced push software updates, e-mail and calendar and contacts information — all tied into an overhaul of Apple's .Mac online service, to be retitled "MobileMe."

Computer can access the service at the easy-to-remember www.me.com, which Apple evidently bought from a smaller company. A visit to that site during Jobs' address brought up a note that the social-networking startup previously there had moved to a new URL.

MobileMe keeps each user's information on a central server, to be accessed via Mac, PC or iPhone — and any changes made will instantly be pushed out to all the user's devices.

Like .Mac, MobileMe costs $99 per year. Existing .Mac users will be upgraded for free.

All the software will be standard on the new iPhones, a free download for existing iPhone units and a $9.95 upgrade for existing iPod Touches.

source : Associated Press