FAQ: Meet the new iPhone 3G

Here's the skinny on the faster, cheaper iPhone

The days and weeks and months of speculation are over. Apple Inc. did, as expected at its Worldwide Developers Conference in San Francisco, retire its original iPhone and replace it with a faster, cheaper model.

You could have knocked us over with a feather. Of course, it would have to be a darn big feather.

Although Apple CEO Steve Jobs took few by surprise on this one, there are still questions to be asked. And answers to be given.

Gimme the lowdown.... What's changed, in 25 words or so? It costs $200 less, downloads Web pages in less than half the time of the old one, boasts longer battery life and includes GPS. Oh, and there's a slew of new apps coming, too.

But does it work with 3G? It better, since Apple's official name is, wait for it..., the "iPhone 3G."

Jobs spent several minutes bragging about the new iPhone's faster speeds, and at one point said it was "approaching Wi-Fi" in performance. In fact, one slide said a file attachment that would take 59 seconds to download over EDGE would take just 21 seconds using 3G. That makes 3G about 2.8 times faster than EDGE.

The same attachment, said Jobs, would take 17 seconds to download using a wireless hotspot.

Second-gen iPhones don't require a 3G network, however, a good thing since in the U.S. at least, 3G coverage, while improving, isn't universal. Instead, the phone will automatically switch between the slower EDGE and the faster 3G networks as necessary.

(AT&T has its coverage maps here; click on the "Data" tab to see 3G and EDGE coverage in your area.)

Scenes from Apple's Worldwide Developer Conference outside the Moscone Center in San Francisco

Scenes from Apple's Worldwide Developer Conference outside the Moscone Center in San Francisco

How much does it cost? The cheapest model, with 8GB of storage space, will list for $199 in the U.S., while the 16GB unit will be priced at $299.

At $199, the 8GB iPhone is not only half the latest price -- before Apple and AT&T stopped selling them weeks and days ago, respectively -- but it's only one-third as much as the price a year ago.

Still feelin' the Apple love early adopters?

When will it go on sale? July 11, a Friday. At least, that's the case in the 22 markets Apple's targeting first: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Mexico, Netherlands, New Zealand, Norway, Portugal, Span, Sweden, Switzerland, the U.K. and the U.S.

The remaining 56 markets -- from Argentina and Botswana to Turkey and Uruguay -- get their iPhones at some unspecified "coming soon" date, according to Apple's online store. And for those out there keeping a close eye on the calendar, July 11 is exactly 54 weeks to the day from the sales debut last year.

Where can I buy one? In the U.S., Apple will sell the new iPhone at its company-owned retail stores and at those operated by its network partner, AT&T.

It's unclear whether Apple or AT&T will sell them online -- we can't imagine why not -- but the Apple store is presently not taking pre-orders, and the Apple press release marking the new models very specifically says: "iPhone 3G will be available in the U.S. on July 11 for a suggested retail price of $199 (US) for the 8GB model and $299 (US) for the 16GB model in both Apple and AT&T's retail stores."

Any catches? Although this will vary market by market, in the U.S. buyers must sign up for a new two-year service contract with AT&T when they purchase an iPhone 3G. The pertinent part of the Apple release says that the iPhone 3G "...requires a new two year contract with AT&T for qualifying customers."

According to AT&T's Mark Siegel, that means existing AT&T customers -- whether they own an iPhone or not -- will have to commit to an additional 24 months when they register a 3G iPhone. That's typical in the cellular business, Siegel said.

How much will 3G rate plans cost? Again, each mobile carrier that's inked a deal with Apple will price its own plans, but in the U.S., where AT&T has exclusive rights, plans will start at about $70 a month for consumers, a fee that will include unlimited data access and a voice plan probably in the same league as the current low-end of 450 minutes (5,000 night and weekend minutes) and 200 text messages.

AT&T will release more specific information about rate plans closer to the July 11 roll-out, said company spokesman Mark Siegel today.

Unlimited data plans for business will run $45 a month.

How much storage space in the new iPhone? Same as there is now. 8GB or 16GB, so there's no change there. Of course, it does make you wonder. If they can make a 32GB iPod touch, why not a 32GB iPhone 3G?

What's Apple say about estimated battery time? Jobs claimed major increases in battery life, saying that talk time using the older EDGE network is now estimated at 10 hours, twice the original iPhone's. When used on a 3G network -- the chipsets required to go 3G are inherently more power hungry -- talk time is cut in half to five hours.

Standby should be in the 300-hour range, said Jobs, while full-tilt, top-speed browsing using the 3G network will give you five to six hours of Net access time.

Alternately, the battery will last for about seven hours of video-only use, and around 24 hours of audio-only.

What's the best new feature that got the least attention? For our money, GPS.

Apple was skimpy on the details, but its site spelled out some of the iPhone 3G's location-finding capabilities, focusing on how the new phone will be able to pass along its location to other applications.

But one line caught our eyes. "Get directions to wherever from wherever. View turn-by-turn directions or watch your progress with live GPS tracking," says Apple's site.

Sure sounds like a replacement for a Tom Tom or Garmin gizmo to us.

Does the new iPhone do push sync? Yes. Enterprises can make use of the iPhone's built-in support for ActiveSync, a Microsoft Corp. communication protocol that synchronizes messages, contacts, calendar items, notes and tasks between a mobile device and an Exchange 2003 or Exchange 2007 server.

Note: This isn't limited to the new iPhones, but comes courtesy of iPhone 2.0, the firmware upgrade for all Apple's iPhones and iPod touch devices. (Keep reading for more on iPhone 2.0.)

For non-corporate types, Apple's revamped its .Mac online sync and data storage service, renamed it "MobileMe" and pitched it as "Exchange for the rest of us." MobileMe, which, like .Mac, costs $99 for a year's subscription, provides push sync between Macs, PCs and iPhones. An iPhone doesn't have to be tethered to a Mac or PC for MobileMe sync, as is the case now.

MobileMe will use a new domain -- www.me.com -- that while not yet active, redirects visitors to the Apple site's marketing materials.

When is Apple releasing iPhone 2.0? A little later than originally intended.

While Apple had earlier promised to have it in users' hands this month, today it said the update would appear in "early July." Circle July 11 on the calendar, to be exact -- the same day slated for the start of iPhone 3G sales.

Current iPhone owners get the update free of charge, but iPod touch owners will have to fork over $9.95. (So that answers the question some have been asking about iPod touch upgrades for those who pick up one during Apple's annual back-to-school promotion.)

The most important, but not only, feature additions that come with iPhone 2.0, are synchronization with Exchange servers (see above) and the ability to download and install software on the iPhone crafted by third-party developers.

I hear there are a lot of new apps for the iPhone. How do I get them? July looks to be a busy month for Apple, since it also said today that its new App Store, the electronic download site-slash-mart for third-party applications, will debut at the same time as iPhone 2.0, July 11.

Today, Apple trotted out several developers, who each had a few minutes to show their upcoming software. Some programs be free -- eBay's auction monitor, for example -- while others, such as the pair of Pangea Software games ported from the Mac, will sell for $9.99 each.

Once the iPhone 2.0 firmware is installed, you'll be able to download applications directly to an iPhone using Wi-Fi or your carrier's data network, or first to a PC or Mac running iTunes, then to the iPhone via sync. Applications up to 10MB in size can be downloaded directly to the iPhone, but larger program must be shunted through iTunes, a requirement meant to limit the impact on cellular networks.

Does Apple still get a share of carrier revenues? It looks like those days are over, at least in the U.S.

In a separate statement today, AT&T said it has struck a new deal -- a more traditional one -- that replaces the revenue-sharing model in play for last year.

"The new agreement between Apple and AT&T eliminates the revenue-sharing model under which AT&T shared a portion of monthly service revenue with Apple," said the telecommunications company. "Under the revised agreement, which is consistent with traditional equipment manufacturer-carrier arrangements, there is no revenue sharing."

Typically, carriers subsidize the cost of new handsets to draw customers, or retain current customers. AT&T's statement used the word "subsidized" just once, but it made it pretty clear that it is, in fact, giving something to Apple in exchange for the lower pricing. "In the near term," the statement reads, "AT&T anticipates that the new agreement will likely result in some pressure on margins and earnings, reflecting the costs of subsidized device pricing, which, in turn, is expected to drive increased subscriber volumes."

Apple's Steve Jobs introduces the iPhone 3G.

Copyright © 2008 IDG Communications, Inc.

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