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The Honolulu Advertiser
Updated at 2:23 p.m., Monday, June 9, 2008

NEW IPHONE
Apple unveils faster iPhone, chops price

By JORDAN ROBERTSON
Associated Press Technology Writer

Hawaii news photo - The Honolulu Advertiser

Apple Inc. CEO Steve Jobs announces a number of new languages that the updated Apple iPhone will work with during his keynote speech at the Apple Worldwide Developers Conference in San Francisco today. Jobs announced innovations to the Mac OS X Leopard operating system and a long-awaited update to the iPhone.

ERIC RISBERG | Associated Press

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Hawaii news photo - The Honolulu Advertiser

Ethan Einhorn of Sega introduces a new video game capability for the Apple iPhone, which will be priced $200 lower than current models, but with more expensive service.

ERIC RISBERG | Associated Press

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SAN FRANCISCO — Apple Inc. unveiled an upgraded iPhone Monday with a faster Internet connection and satellite navigation capabilities — priced $200 lower than current models, but with more expensive service.

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. The devices are to roll out initially in 22 countries.

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

AT&T Inc., the exclusive U.S. carrier for the phone, said its plans for the phone will start at $39.99 per month, plus $30 for unlimited data. That works out to be a $10 increase from the cheapest plan for the first-generation iPhone.

AT&T also warned of an earnings hit due to the pricing, pointing to carrier subsidies as the reason for the price cut rather than a price reduction from Apple.

And Apple said in a regulatory filing that under most of its new carrier agreements, it will not receive a share of subscribers' monthly service fees, as has been the case with the first-generation iPhone.

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.

Apple said the 3G iPhone downloads data twice as fast the old one.

Apple Chief Executive Steve Jobs said that when the original iPhone was designed, the chips used on the faster network sapped too much battery life and were too bulky. 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.

Apple said it had sold 6 million iPhones since the first model was launched nearly a year ago, and 700,000 since March. That points to a steady slowdown in sales from the fourth quarter last year, as customers have been waiting for the 3G version.