NEW YORK—As many industry watchers had expected, Apple Inc. announced its long-awaited 3G iPhone on Monday at its annual World Wide Developers Conference.
The new iPhone is strategically priced at $199 for the 8 GB version, far below the $399 of its predecessor. In a taped message from the launch, CEO Steve Jobs said that the new phone made it "more affordable" for consumers.
The 3G iPhone brings much faster broadband speeds to the iPhone, and is expected to take the European mobile phone market by storm. The iPhone will launch on July 11 in 22 markets.
3G technology is already prevalent in Europe, though it has recently gotten more popular in the United States as well. Most providers such as Verizon Wireless and Sprint offer 3G access through a technology known as EV-DO, while AT&T Inc., Apple's service provider for the iPhone in the United States, provides service through a similar standard called HSPA.
On June 5, AT&T announced that it had upgraded its 3G network speed by around 20 to 50 percent. It was widely believed that AT&T had completed the upgrade to coincide with the iPhone launch.
AT&T also reported earlier this month that it had sold out its current iPhone inventory, indicating that Apple was creating a shortage in order to increase the appeal of the new iPhone.
Apple has also signed partnership deals with other service providers in other countries. In the United Kingdom, O2 will be providing service for the iPhone, and Telefónica S.A.'s Movistar is Apple's partner in Spain.
The new iPhone is also believed to have a flexible pricing point, and not a fixed one as in the previous model, giving some flexibility to service providers.
In the United States, AT&T announced that it would increase the unlimited iPhone data plan by $10 to offset its subsidy of iPhone's price. Personal data plans now start at $30, and the business plan will cost $45 per month.
The new iPhone is expected to be evenutally sold in over 26 countries around the world, including in North America, Europe, South America and Asia.
Apple is now the second largest smartphone manufacturer in the United States, with a market share of 20 percent, but its market share worldwide is only around 5 percent. The new iPhone is expected to increase Apple's market share, especially in Europe, which has widespread 3G deployment.
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