Crave

Editor's note: Though this FAQ posted originally on June 11, we updated it on July 1 to reflect new information from AT&T.

Is your heart aflutter at the thought of buying an iPhone 3G? Are you counting the days until the July 11 release date? If this describes you, or even if you are just toying with the idea, there are a few things you'll need to know. The process for buying an iPhone 3G will be quite different from what it was last year for the original model. Fortunately, CNET is here to tell you all you should need to know.

The iPhone 3G

(Credit: James Martin/CNET Networks)

Q: What's so great about the iPhone 3G?
A: The iPhone 3G adds important features that were absent on the original iPhone. It now has support for AT&T's 3G network, true GPS, and Microsoft Exchange server. The iPhone 3G also will support third-party applications available through the upcoming App Store. Its design is different as well, but not by much.

Q: What's not great about it?
A: We were hoping to see a few more features, including multimedia messaging, voice dialing, video recording, and a landscape keyboard.

Q: So should I get it?
A: If you want an iPhone, but haven't yet bought one, this is the iPhone for you. If you already own an iPhone, the choice isn't as clear. However, if you can afford to upgrade, you should. The added features will be worth it. We only stress that you should verify that AT&T has adequate 3G coverage in your area. If you buy it and you find out that your 3G service is inadequate you'll have 30 days to return the iPhone without paying an early termination fee.

Q: Where can I buy the iPhone 3G?
A: It will be available only in Apple and AT&T stores. You'll also be able to get it at AT&T kiosks in shopping malls but it will not be available online. The iPhone 3G will go on sale at 8 a.m. local time on Friday, July 11.

Q: Wait, so I can't get it on the Apple or AT&T Web sites?
A: No, you'll have to go to a store, which is more than inconvenient if you don't live near one.

Q: Can I still activate my phone using iTunes?
A: Unfortunately, you'll have to do that in an Apple or an AT&T store as well. You will not be able to take it home and do it there. Major bummer. There will be an activation fee of either $18 for existing customers eligible for an upgrade, or $36 for new customers.

Q: Why are AT&T and Apple doing that?
A: We suspect that it's a way to crack down on iPhones that were purchased but were never activated on AT&T's network. By forcing you to activate the phone in a store, you'll be forced to sign up for AT&T service.

Q: Won't that create a mob scene on stores on July 11?
A: It should be pretty crazy that day. Though stores were mobbed last year, buyers had only to pay for their phone and get out. This year, however, they'll have to go through the entire process for credit approval, contract signing, and activation before they can leave. If you figure that each person will take at least 15 minutes to complete their transaction, then we should see some long, and slowly moving, lines.

Out with the old.

(Credit: Corinne Schulze/CNET Networks)

Q: Will AT&T employees be working in Apple stores?
A: Probably not. Apple has not released details, but we expect that the process will be similar to how stores such as Best Buy handle cell phone activations now. It's likely that you'll be dealing with an Apple employee who will have access to AT&T's computer system.

Q: How much will the iPhone 3G cost?
A: This is one area of good news. While last year buyers paid up to $600 for their iPhones, the iPhone 3G will be significantly cheaper. The 8GB model will cost $199 and the 16GB model will cost $299, both with a two-year contract. However, to get that price, current AT&T customers must be "upgrade eligible". To find out if you're eligible, contact AT&T. If you don't qualify, the iPhone 3G will be $399 for the 8GB model or $499 for the 16GB version. Both require a two-year contract as well.

Q: Is there price for the iPhone 3G without signing a contract?
A: Customers who purchase the phone without a contract will pay $599 for the 8GB version or $699 for the 16GB model.

Q: Can I use an iPhone 3G with AT&T's Go Phone prepaid service?
A: Not at the moment. But this may happen in the future.

Q: What about a family plan?
A: AT&T hasn't addressed this yet.

Q: But what's this I hear about the plans being more expensive?
A: It's true that Apple and AT&T are changing the structure and pricing for the iPhone 3G plans. Unlike with the previous handset, you will have to select separate voice and data plans (they won't be combined). Voice plans, which are the same for all AT&T handsets, range from $39.99 to $79.99 per month, depending on the available minutes. Unlimited data plans will be $30 for consumers and $45 business users.

As a result, the cheapest monthly cost for an iPhone user will be $69.99 for unlimited data, plus 450 anytime minutes and 5,000 nights and weekends. That's $10 more than what current iPhone users' pay for comparable services.

Q: The original data plan came with 200 free text messages. How much text messaging do the new data plans include?
A: AT&T is charging $5 for every 200 text messages; $15 for every 1,500 messages; and $20 for unlimited text messages.

Q: Will the new $30 and $45 a month data plans offered for the iPhone 3G be the same as the standard data plans for other AT&T smartphones?
A: Not necessarily. According to AT&, it is still working out the details and will have more information closer to July 11 when the phones go on sale.

Q: I heard that people who already have a first-generation iPhone have to turn it in to an Apple or AT&T store if they want the 3G phone. Is that true?
A: No, but AT&T is giving people who bought their first-generation iPhone on or after May 27, 2008, the opportunity to exchange it before August 1. AT&T and Apple will refund the difference in price but iPhone 3G users will have to sign a new two-year contract and choose a new plan. If you go this route, don't forget to erase your personal data.

Q: If I keep my current iPhone, will I miss out on all the new features?
A: Through the iPhone 2.0 software update, you'll get a lot of new goodies including the third-party applications and the Exchange server support. Yet, you will miss out on the 3G and GPS.

In with the new.

(Credit: Apple)

Q: I already have a comparable smartphone from AT&T and a two-year service contract. Can I buy the iPhone 3G for the $199 price and simply restart my contract?
A: It depends on when you started your initial AT&T contract. To get the $199 price tag, you have to meet AT&T's upgrade eligibility criteria. We'll know more on that later. But for the most part, even current AT&T customers will need to sign a new contract.

Q: Let's say I bought my iPhone last year and I want the iPhone 3G. Can I give my old iPhone to my sister or sell it on eBay?
A: No, once an existing iPhone user activates service for an iPhone 3G, their first-generation handset will be unusable as a phone. You won't be able to replace it with another AT&T SIM card and use it to make calls. This also means that you can't buy an old iPhone on eBay and expect to activate it on AT&T's network. However, you can use it as a media player and a Wi-Fi device for browsing the Web.

Correction: Originally, we had received incorrect information from a source at AT&T. If you decide to pass it on to someone else, they will be able to activate the phone through iTunes but only by activating a new account. If you (or anyone else) do not open a new account, the old iPhone will be unusable as a phone, even if you insert another AT&T SIM card. In that case, you can use the handset only as a media player and a Wi-Fi device.

G: Given the in-store activation requirement, how can I buy an iPhone 3G as a gift?
A: We're not sure yet, but we're checking with AT&T.

Q: Will people living in areas without native AT&T coverage be able to buy an iPhone 3G?
A: No, anyone buying an iPhone 3G must live in an area where AT&T provides coverage. Since the phones will be activated right in the store, people won't be able to leave the store without activating the phone for service in area where AT&T is offered.

Q: Will the SIM come preinstalled this time?
A: Yes, the SIM is already installed and is not meant to be removed or replaced with other AT&T SIM cards (though it is physically possible to do so). On the other hand, Apple will include a SIM removal tool in the box.

Q: Do I have to be in the store to get software updates or to sync it with iTunes?
A: No, updates and syncing with iTunes can be done right from your home computer. You can also buy applications from the App Store from your computer.

Q: Can I use the iPhone 3G overseas?
A: As a quad-band GSM phone with support for three 3G bands, you'll be able to use the new iPhone all over the world. Just remember that the phone will be locked to AT&T so you won't be able to use another carrier's SIM card. If you're a frequent globe-trotter, you should ask about AT&T's international plans to avoid nasty surprises on your bill.

Q: Will the iPhone ever come to other carriers in the United States?
A: There is a chance it could come to T-Mobile, but it won't be for a long time. AT&T is believed to have a five-year lock on the iPhone (now through 2012), but other reports indicate that its monopoly will be up in 2010. Unfortunately, it's unlikely that Apple will ever develop a CDMA version for Sprint or Verizon Wireless.

CNET News.com's Marguerite Reardon and Dawn Kawamoto contributed to this report.

The App Store won't be arriving in June, despite reports to the contrary based on Apple's Australian Web site.

(Credit: James Martin/CNET News.com)

Apple has moved to squash rumors that the iPhone's App Store could be coming sooner rather than later.

Earlier Wednesday, Apple's Australian Web site had a little note at the bottom of its page about the iPod Touch that said "Shop for hundreds of applications made for iPod Touch. Available June 27." On Monday, Apple announced that the App Store, which is part of the iPhone 2.0 software release, would arrive on July 11.

An Apple representative confirmed that July is still the plan, and the Aussies have since updated their page to point to a link to the iPhone's SDK page. It's not clear where the June 27 date came from, but there seems to have been some confusion this month about the App Store: a source told us last week that applications would be "launching" on Monday, and in this context, "launching" appears to have meant "showing off quick snippets of the application's capability."

I have to admit that during the past year I've been gloating to my CNET Asia colleagues over the iPhone. I just had to savor the fact that at long last the United States got a hot tech gadget before they did. At least with high-end cell phones, that almost never happens.

But in just a few weeks my bragging days will be over. On July 11, the new iPhone 3G lands not only in the United States with AT&T, but also in 21 19 other countries. In his WWDC keynote address, Apple CEO Steve Jobs included France and Belgium in the initial release list, but Orange has confirmed that French customers will have to wait until July 17. And across the border, Belgium's Mobistar has yet to set a date.

Then, later this year, Apple will ship to an additional 48 nations in every continent except Antarctica. That's 70 countries, kids--a far cry from the six nations in which the current iPhone is available today.

Interestingly, countries such as Australia and Italy will have two supporting carriers. Mainland China and Russia are two big places missing from the list, along with Taiwan, Korea, most of Southeast Asia, and almost the entire Middle East. So for those who missed the rapid-fire map shown during the at the keynote, here's a full list with supporting carriers.

July 11 releases

• Australia - Optus, Telstra and Vodafone
• Austria - Orange and T-Mobile
• Belgium - Mobistar
• Canada - Rogers
• Denmark - Telia
• Finland - Sonera
• Germany - T-Mobile
• Hong Kong - Hutchinson Telecom
• Ireland - O2
• Italy - Telecom Italia and Vodafone
• Japan - Softbank
• Mexico - America Movil
• Netherlands - T-Mobile
• New Zealand - Vodafone
• Norway - NetCom
• Portugal - Orange and Vodafone
• Spain - Telefonica
• Sweden - Telia
• United Kingdom - O2
• Switzerland - Swisscom and Orange

Later releases

• Argentina - America Movil
• Botswana - Orange
• Brazil - America Movil
• Cameroon - Orange
• Central African Republic - Orange
• Chile - America Movil
• Colombia - America Movil
• Croatia - T-Mobile
• Czech Republic - Vodafone and T-Mobile
• Dominican Republic - Orange and America Movil
• Ecuador - America Movil
• Egypt - Orange and Vodafone
• El Salvador - America Movil
• Equatorial Guinea - Orange
• Estonia - Eesti Mobii Telefon
• France - Orange (July 17)
• Guatemala - America Movil
• Guinea - Orange
• Guinea-Bissau - Orange
• Greece - Vodafone
• Honduras - America Movil
• Hungary - T-Mobile
• India - Bharti Airtel
• Ivory Coast - Orange
• Jamaica - America Movil
• Jordan - Orange
• Kenya - Orange
• Latvia - LMT
• Liechtenstein - Swisscom
• Lithuania - OmniTel
• Macau - Hutchinson Telecom
• Madagascar - Orange
• Mali - Orange
• Malta - Vodafone
• Mauritius - Orange
• Nicaragua - America Movil
• Niger - Orange
• Paraguay - America Movil
• Peru - America Movil
• Philippines - GlobeTelecom
• Poland - Orange and Era
• Romania - Orange
• Senegal - Orange
• Singapore - SingTel
• Qatar - Vodafone
• Slovakia - Orange and T-Mobile
• South Africa - Vodacom
• Turkey - Vodafone
• Uruguay - America Movil

Updated June 11, 1 p.m. PDT to reflect French and Belgian developments and additional carrier information.

Apple wowed the cell phone industry a year ago with the first version of the iPhone. And now its new software development kit and soon-to-be-launched application store featuring third-party applications could change the game yet again. (To get a closer look at the third-party software unveiled Monday, click here: "Video roundup: New apps coming to the iPhone.")

The big news Monday at Apple's Worldwide Developers Conference in San Francisco was of course CEO Steve Jobs' announcement of a 3G version of the iPhone. But the company also made several software announcements that could set a new standard for getting new and innovative applications to market quickly.

There's no question that Apple's launch of the iPhone last year changed the handset market. The touchscreen device loaded with a full Web browser that allows people to shrink and enlarge Web pages set a new standard for what people can expect when surfing the Net on their phones.

But with the SDK and the soon-to-be-launched application store, Apple has shown the true power and vision of the iPhone, which goes well beyond simple Web browsing on the go. The company has created a powerful platform for developing new applications, plus a set of simple tools that can be used to quickly and easily bring new mobile applications to market. And it's created an App Store, linked with its popular iTunes music and video store, where these applications can be easily searched for and downloaded.

"A device is nothing without applications," said Ken Dulaney, an analyst with Gartner. "The one lesson you can take away from Microsoft is that once you attract the developers the rest is an easy coast downhill. And I'm incredibly impressed at the speed in which Apple's application development platform has matured."

For many application developers, creating applications for the mobile environment can be a time-consuming process. There are hundreds of different handset models with different processing capabilities and screen sizes. And there are dozens of operating systems. Mobile developers often find themselves developing various versions of their product so they can fit on a wide range of devices. As a result, it can take several months just to launch a single application.

Loopt in the loop
Apple has tried to alleviate this problem with a simple-to-use tool that allows developers to create applications by simply dragging and dropping icons, slashing the time for development into a matter of weeks. During the keynote Monday, Scott Forstall, senior vice president of iPhone software at Apple, took the audience through the actual developer experience, demonstrating how quickly and easily a complex service can be created.

Specifically he showed how he could merge contacts databases and location-aware services. He also showed how easily the completed application could be tested right on the Mac for bugs or to make different aesthetic choices, such as whether to put things in the toolbar or within the regular fields.

"The tool is amazing," said Sam Altman, CEO of Loopt, one of several companies that has used the iPhone SDK to develop an iPhone application. "In two months, we were able to make the best version of Loopt we've ever created. It's taken us nearly a year to create other versions of our software."

Loopt already has its application on phones that use the Sprint Nextel and Verizon Wireless networks. These service providers offer Loopt's friend-tracking application for a monthly fee. iPhone Loopt users will be able to get it for free.

But it's not just the ability to create applications more quickly and more easily that excites application developers; Apple has also created a rich environment in which to develop the applications. The APIs used in the SDK are the same ones Apple uses to develop applications internally. And there are many similarities between the iPhone's operating system and the Mac OS X, making it easier for Mac developers to create rich applications.

"The underlying software platform for the iPhone is much more powerful than any other mobile device we've seen," said Jeffrey Litvack, global product development director for the Associated Press. "It just makes it much easier for us to show off all our multimedia content, like videos and pictures. It's more challenging on other platforms."

Loopt's Altman agreed.

"The quality of mobile applications for the iPhone is just so much better," he said.

Apple invited several developers to show off their applications. In addition to the friend finder Loopt application, Sega demonstrated a new version of Super Monkey Ball. eBay showed off a new application for keeping track of auctions. And others such as Modality showed an application that gives medical students up-close views of human body parts to help them study anatomy. Major League Baseball demonstrated an application that gives near real-time updates on games. And the Associated Press showed off an application that sends out local news based on a user's location.

The distribution challenge
There are other problems that application developers face that Apple promises to help solve, namely distribution. In a traditional model, application developers can either distribute their applications independently or they can work directly with mobile operators.

Companies such as Handango have created application stores for devices like Research In Motion's BlackBerry that developers can use to distribute their applications. There are also stores for Windows Mobile devices and ones created for the Symbian operating system, which is used by Nokia. But consumers are often unfamiliar with these stores making it difficult for developers to count on a reliable distribution chain.

The other option for application developers is to work directly with mobile operators so that their applications are either embedded in specific handsets or can be found on the carrier's "deck."

Getting "on deck" or embedded in a specific phone is often a long, arduous process. And once an application has made it this far, it's no guarantee that it will be easily discovered by users. Embedded applications usually have an icon that may be prominently displayed. And applications in carrier decks can be buried beneath several layers of menu. Application developers are constantly fighting for a top spot in these menus.

"Discoverability is a challenge for all application developers," said Tom Frencel, president of Cabybara Games, a mobile games company. "Some of these menus are pretty deep and they're difficult to navigate. "

During his keynote Monday, Jobs officially announced the upcoming iPhone App Store, which was first talked about in March when he announced the release of the iPhone software development kit.

The App Store isn't yet available so it's difficult to say for sure how it will work, but it's likely that the interface will look very similar to the popular iTunes music and video store. iPhone users will be able to browse the store directly on their phones and download applications either over the cellular network or over a Wi-Fi connection. And for iPhone users who want to look for applications on their PC, they can use the PC-based iTunes to search, download, and purchase applications just like if they were looking for songs, videos, or podcasts.

"Millions of people are already using iTunes," Frencel added. "I think the PC is the most powerful interface to browse content anyway, so it makes sense to use it."

Today, Apple's iPhone makes up only a small percentage of the overall cell phone market. But it's quickly gaining ground on smartphone competitors such as Research In Motion, Nokia, and Palm. The basic design and functionality of the iPhone has set the bar for a phone of this class. And if Apple can broaden the device's appeal with thousands of cool third-party applications that are easy to find and just as easy to access, then it just might set the bar yet again in the mobile market.

It keeps growing and growing.

(Credit: Corinne Schulze/CNET Networks)

There was more news today from Apple's WWDC than just the announcement of the iPhone 3G. CEO Steve Jobs also announced the iPhone 2.0 software update. Available to current iPhone and iPod Touch owners, the software update adds several new features that are interesting, if not extraordinary. Indeed, I warmly welcome the addition of Microsoft Exchange server support and the third-party applications, but I was hoping for a lot more. The software update will be available in early July; iPhone users will get it for free while iPod Touch users will pay $9.95. Here's a summary of what we'll see.

Enterprise support
As promised last March, the iPhone will support the Microsoft Exchange server. That means you'll be able to get push e-mail, contacts, and calendar. This is a big win for corporate users who have iPhones but have had to carry another device (like a BlackBerry) to access their work e-mail. Other new features will include auto-discovery, global contacts access, and remote wipe.

Third-party apps
The new software also adds full access to the iPhone apps store, which is also set to open in early July. The new applications range from games that integrate with the phone's accelerometer to a mobile version of eBay. We saw a number of apps demonstrated today.

Contacts search
Currently on the iPhone you can locate contacts only by browsing your entire phone book. Now you'll be able to locate exactly the friend you want, which is particularly useful if you're popular.

iWork documents and PowerPoint
That's right, you'll get access to documents created in iWork. And for the presentation-happy, you'll be able to read, but not edit, PowerPoint attachments.

Bulk delete and move
This is a pretty simple feature, but it's one the iPhone needed. It can get pretty tiresome to delete individual items from a list so we're glad to see that Apple took pity on us.

Photo saving
Now you'll be able to save photos sent as e-mail attachments directly to your photo library.

Steve shows off the new calculator.

(Credit: James Martin/CNET Networks)

Scientific calculator
Jobs said a lot of people asked for this and frankly, I'm wondering who they are. When you're using the calculator and you tip the phone to its side, you'll get more buttons and a landscape orientation.

Parental controls
Jobs didn't expand on what we'll see here. We'll report back when the software update is available.

Language support
This is exciting for our friends abroad. The software update will bring language support in French, German, Japanese, Dutch, Italian, Spanish, Portuguese, Danish, Finnish, Norwegian, Swedish, Korean, Simplified Chinese, Traditional Chinese, Russian, and Polish. You'll also be able to use a graffiti-style application for entering characters in Asian languages.

So what's missing?
It continues to baffle me why Apple won't add multimedia messaging and video recording. Those features are available on even the simplest phones that you can get free from a carrier. Voice dialing would be another huge win and I'd love to see a landscape keyboard for composing e-mails and messages, cut and paste, and a stereo Bluetooth profile. I know I was dreaming when I wished for a user-replaceable battery, a memory card slot, and tactile feedback for the touch screen, but the other omissions I just can't forgive. And now that the original iPhone is being sent out to pasture in favor of the 3G model, it never will.

The second chapter of Apple's iPhone era is almost ready to begin, and it's already clear that things will be a little different this time around.

Few people who pay even scant attention to the technology industry could claim to be shocked by the introduction of a faster iPhone earlier on Monday by Apple CEO Steve Jobs. Apple has sold 6 million iPhones since June 2007, Jobs said, and will likely sell a few more once the new model arrives on July 11 with a faster networking chip, GPS capabilities, and a software upgrade that's an IT manager's dream for a mobile device.

Apple CEO Steve Jobs unveils the 3G iPhone. For more photos from the event, click on the image.

(Credit: James Martin/CNET News.com)

From a features point of view, the new model delivers on what iPhone customers want and need. Yes, you still can't do mobile messaging, and I still don't think you can do cut-and-paste, which is just bizarre. But Apple has added just about everything else people have asked for or complained about in iPhone 1.0: faster networks, secure access to corporate e-mail, precise location-based services, and third-party applications.

What's perhaps more interesting is what Apple has learned about the mobile phone business. It's not all that surprising that Apple, which has a proud legacy of product design and software development, would have created an excellent product that has the rest of the industry scrambling to overtake.

But several developments later on Monday indicate that Apple has had to learn just as many lessons about playing in the mobile phone market over the past year as it has taught the mobile phone industry about product development.

About 90 minutes after Jobs concluded his keynote, AT&T held its own press conference to announce some major changes in the way iPhones are sold. You now must immediately agree to a two-year contract with AT&T whether you buy the iPhone in one of Apple's stores or one of AT&T's stores, and there will be no online ordering. AT&T and Apple have ended their revenue-sharing agreement, and Apple also said that the "vast majority" of its new carrier agreements overseas do not involve revenue sharing. To top it off, iPhone data plans are now $10 more expensive.

This just might be the aftereffect of the unlocked iPhones. Apple executives downplayed the actual number of unlocked iPhones several times this year, claiming they couldn't estimate how many iPhones had actually been unlocked and that in any event, it just demonstrates demand for the product.

But Apple's carrier partners sure cared about that number. Apple negotiated extremely favorable deals for iPhone 1.0, getting a piece of AT&T and other carriers' revenue for data services while retaining complete control over what applications would appear on the device.

Apple held up its end of the bargain in one sense--delivering a solid product that enticed people to switch networks and drove data usage--but failed to secure its product against those who wished to unlock it from its designated networks, forcing some carriers to watch their rivals reap the benefits of iPhone data usage. Wireless carriers may be opening up their networks in new and interesting ways, but their influence on the mobile market isn't waning just yet.

It's not clear whether Apple will introduce technology changes into the new iPhone that makes it harder to jailbreak, then unlock, but it will at least require U.S. iPhone buyers to sign a two-year contract and activate the iPhone on AT&T's network before they can take it home. This won't eliminate unlocking, but could discourage it to some degree.

The faster speeds, additional countries--and a tweak to Apple's business model--should help the company hit its goal of shipping 10 million iPhones in 2008.

(Credit: James Martin/CNET News.com)

Of course, compromise is part of any good partnership. In exchange for giving up revenue sharing and its novel at-home activation service, Apple is getting a subsidized iPhone. That will lower the price of entry into the iPhone world and should accelerate sales without dinging Apple's product margins to the degree that would be result if Apple absorbed the cost decrease itself. The increased sales should also offset the loss of the shared revenue.

So the big question: will the iPhone 3G--and new business model--enable Apple to meet its sales target for 2008 of 10 million units? If Apple has sold 6 million units to date, as Jobs said in his keynote, that means the company has a long way to go, having sold just 2.3 million iPhones so far in 2008.

The fact that the new iPhone won't be available until July 11 was one of the most surprising things to emerge from this morning's keynote. Apple, of course, never put a finer grain on when it expected to ship iPhone 3G beyond "next year," which Jobs quoted a few times in response to questions about the issue in 2007. But few expected the company to miss the one-year anniversary of the iPhone's debut with the new model, and at the very least, Apple itself had promised the iPhone 2.0 software by the end of June.

That means Apple will have shipped almost no iPhones from roughly the middle of May to July 11: about two whole months, although AT&T stores took longer to run out of their supply. We'll get a more precise number for iPhone shipments during Apple's third fiscal quarter, which ends in June, during the company's earnings call in July. But no matter how you slice it, that's a large gap that points to a bit of a supply chain snafu at some stage along the way.

Apple's Greg Joswiak, vice president of worldwide iPod and iPhone marketing, reiterated Apple's 10 million shipment goal in an interview after Jobs' keynote, so it's not like Apple is backing down. There are two main reasons why the company can still be confident: the combination of 3G and the cheaper price will spur potential customers who have been sitting on the sidelines in countries where the iPhone already exists, and a total of 70 countries will get official access to the iPhone, including major new destinations like Canada and Australia. In addition, Jobs hinted to CNBC later in the day that the big prize--China--could be coming sooner rather than later.

It's always interesting to watch a company try to make its way into an entirely new business; those who fail far outnumber those who succeed. The most common reason why many fail is because they forget to learn from their initial experiences, or assume they know better based on their past successes.

Apple may not proclaim it from on high in the Stevenote, but today the company showed that it's willing to learn from its mistakes, and to adjust its business model when prudent. So far in its iPhone era, Apple has wisely tackled the hard problem first--making a great product, and continuing to improve it--and is now making the kinds of changes to its business model to make sure the iPhone really does turn into the third leg of the company's business some day.

As expected, Apple CEO Steve Jobs used his time on stage at the Worldwide Developers Conference to announce a new version of the iPhone.

We've pulled together our video clips of his introduction, along with demos of some of its new features, including GPS, the faster 3G wireless technology, and MobileMe, a service that syncs users' e-mail and calendar info on every device they register. Follow the jump for all those videos. And go here to see a roundup of all the third-party apps shown off Monday.

Sega's Super Monkey Ball will be ported to the iPhone

(Credit: James Martin/CNET News.com)

One of the more intriguing outcomes from the iPhone SDK and the upcoming App Store is the notion of the iPhone as a mobile gaming platform. When the SDK was announced, game developers leaped on the chance to develop games for the iPhone, which seemed like an exciting new playground for mobile games. But frankly, I was skeptical. I have both a Sony PSP and a Nintendo DS; would gaming on a cell phone really be good enough to compete? We've all witnessed the debacle that was the Nokia N-Gage, and how terrible that turned out to be. It's one of the many reasons the majority of cell phone games are still really simple, like puzzles and card games, with the occasional retro game like Pac-Man thrown in for good measure.

But the iPhone's luscious touch-screen display and internal accelerometer seem to promise something more. I was first intrigued by the Touch Fighter game Apple developers whipped up to show off the iPhone SDK way back in March, and even more so by the scaled-down mobile version of Electronic Arts' hotly anticipated Spore. Still, these were just demos, and I wasn't sure if they would pan out to anything substantial. However, after the keynote at WWDC, I find myself suddenly excited about the future of the iPhone as a genuine gaming platform. Out of the 12 or so applications that were demonstrated, 4 of them were games. And these weren't just simple Tetris-like games either (The one exception was Enigmo by Pangea Software, which is a 3D puzzle game). Sega's Super Monkey Ball was especially a highlight, fully utilizing the iPhone's accelerometer as a way to tilt the ball through various mazelike structures. Pangea Software's Cro-Mag Rally also uses the accelerometer so you can drive simply by "steering" the iPhone left or right. Not to be outdone, Digital Legends Entertainment even promised a full-blown RPG in the form of Krull, a caveman adventure where you can fight off bad guys, swing from rope bridges, and more. Of course, you not only get all these games, you also get a cell phone, a media player, and a GPS unit, all in one device. Suddenly, my Sony PSP (which I haven't touched in months) doesn't seem so hot.

The true genius behind the iPhone's gaming potential lies in the low introductory cost. Sure you have to cough up $200 or so for the device, but each game will sell for $10 while most DS games are $30 to $40. Now I'm not saying the iPhone should be seen as primarily a gaming device--it is first and foremost a cell phone no matter how you look at it. Also, the Sony PSP and Nintendo DS have dedicated controls and tactile buttons, which are very important for certain kinds of games--I certainly don't think Tekken or Zelda will translate very well to the iPhone. That said, for those who are tired of carrying around multiple devices, or those who just want a casual handheld to play games on the train or on the bus, the iPhone could definitely be a serious contender in the mobile gaming space.

And man, if they ever introduce Mario Kart to the iPhone, it's all over.

iPhone 3G: Something for everyone?

(Credit: Apple)

Crave is teeming with iPhone 3G posts today, and most of them will offer you either an opinionated or a subjective analysis on one or another aspect of the device. You can find service plan assessments, thoughts on the future of GPS, and complaints related to the music player and service.

You won't find any of that here--I don't have much of an opinion on the iPhone 3G. What can I say? It's the end of the day, and my thought process is consumed with an overwhelming desire to kick back on my couch with a glass of Pinot and relish in the fact that we probably won't have another day of Jobs-announcement-related insanity for another few months.

What you can find here are some close-up images of the iPhone 3G, along with a breakdown of the key design tweaks and new features that you can expect (and some that you can't) come July 11. Check out the iPhone 3G slide show for the details.