Apple's New iPhone: More Speed, Less Money

(CBS/ AP)  Apple Inc. unveiled an upgraded iPhone Monday with a faster Internet connection and GPS capabilities - and priced $200 lower than current models.

Analysts have said Apple needed to slash the multimedia gadget's price and upgrade it to work over so-called 3G, or third-generation, wireless networks to hit the company's target of selling 10 million iPhones by the end of 2008.

An 8 gigabyte model is to sell for $199 starting July 11. A 16 gigabyte model will cost $299. They'll come in a black case with a white case optional on one model. The devices are to roll out initially in 22 countries.

The original iPhone price was dropped to $400 plus a two-year contract with AT&T - still a pretty sizable investment, especially in this economy, reports CBS News technology correspondent Daniel Sieberg.

So what will people do with their old one?

"I expect there will be a fair amount of anger, people who feel they jumped too early. But there's always buyer's remorse with technology," said Lance Ulanoff, editor in chief of PC magazine.

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CBS News technology correspondent Daniel Sieberg blogs live from Apple's Worldwide Developers Conference.

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Apple has inked deals for wireless carriers in a total of 70 countries to carry the new iPhone.

"This week's World Wide Developers Conference is all about recruiting software developers to write for Apple products, including the iPhone," says CBS News technology analyst Larry Magid. "We should soon see hundreds if not thousands of new games and programs for the phone, turning it into not just a smart phone but a pocket-sized PC."

Apple's participation in the cell phone market has been hurt by complaints about the year-old iPhone's data download speeds, which can make simple tasks like sending pictures over e-mail or downloading Internet videos painfully slow.

The original iPhones operate on so-called 2.5G networks. The upgrade in performance from those networks to 3G will be similar to the difference between a dial-up Internet connection and a high-speed broadband connection.

Apple Chief Executive Steve Jobs said the computer chips used on the faster network sapped too much battery life and were too bulky when the iPhone was being designed so the company decided to wait to improve the device until better chip technology emerged that could fit the iPhone's slim design.

The addition of global-positioning technology improves the iPhone's accuracy in locating users. Current versions use a combination of cell phone towers and Wi-Fi locations to help users figure out where they are.

Jobs showed off the phone at Apple's Worldwide Developers Conference in San Francisco. His announcements were widely expected.

[cjs_cnet_xyz]

Why keep saying costs less? It costs more.

[harrydoghiny]

When Jobs can design a product with a user-replaceable battery I''ll be impressed. In the meantime, I''ll keep my Razr.

[feelfree4u]

Why does Apple need a free ad from CBS, and why would anyone consider this to be news?

[republic1776]

They should NOT lock in to any Carrier.
How would you like to buy a TV that can only use one service?
Or buy a new car and be forced to always use the same oil company.
I''ll don''t buy into monopolies.
Comcast is just as bad!
That''s why I love capitolism!

[dnamj]

I''ll never give a dime to those chodes at At&T who sold the names to the Bush Admin.

Never.

And now they want retroactive immunity?

I love my blackberry, I love T-Mobil.

[hypnotoad72]

iNot-environmentally iFriendly iGarbage

[barbaraf4]

"Apple you need to get away from AT&T and go with another major carrier. AT&T is the worst company on the planet" Posted by acolton1
~~~~~~~~~
Well said. We had Cingular, who merged with AT&T. When iPhone endorsed AT&T as their carrier, was when I knew I would never own one.

[j_flood]

Sounds like they''re catching up to my N95....oh yeah, I''ve had that nearly a year now...

[acolton1]

Apple you need to get away from AT&T and go with another major carrier. AT&T is the worst company on the planet they lie to everybody and your bill is always wrong and when you call customer serivce they blame the computer for your bill being wrong. They blame the computer because the computer cant fight or argue back. I will never give AT&T another red cent of mine the rest of my life. AT&T ruins people lives because they lie all the time. I got a piece of mail from they last week telling me I can get phone serivce for $14 a month so I called them and asked questions and it was a major scam and bait and switch BS. NEVER TRUST AT&T.

[CBSTV]

Okay, Apple ... This time you got me. I will buy iPhone 2.0 in July.