Archive for the ‘iPhone’ Category

Apple CEO Steve Jobs today introduced the second-generation iPhone with new pricing and with 3G and GPS capabilities.

An 8GB iPhone 3G will sell for $199 — one-third of what the 8GB iPhone sold for at launch. A 16GB model will sell for $299, and will come in white and black versions. Sales of the new handsets will begin on July 11.

Jobs made the announcements in his keynote speech kicking off this year’s Apple Worldwide Developers Conference in San Francisco.

Conspicuously missing from today’s announcement was any mention of how much the corresponding 3G wireless services will cost. AT&T Wireless currently is the iPhone’s exclusive provider in the United States, but 3G services are not part of the existing iPhone plan since the original phone doesn’t support that. The iPhone 3G will be introduced in 22 countries at launch.

The iPhone 3G, as its name implies, will feature support for 3G cellular networks. The original iPhone’s lack of 3G support was widely criticized when that model launched last summer.

GPS capability

In his announcement of the new device, Jobs provided precious few details about the phone. And much of what he did announce was already expected. The biggest revelation about the new phone is its inclusion of GPS location tracking, a feature that many iPhone users insisted on for the next-gen device.

Jobs was relatively quiet on the phone’s physical dimensions. He made a point of calling out the iPhone 3G’s thinner edges and plastic back, but he did not mention anything about its thickness (rumors pin the 3G model as being thicker than its predecessor, in order to accommodate the 3G radio and other components).

The headphone jack is now flush with the upper edge of the phone — a huge improvement over the design of the previous version, which required a kludgy plug to connect a headphone.

Another enhancement over the first-generation iPhone is a boost to the device’s battery life. In spite of its faster broadband data speeds, the device will offer up to 300 hours of standby time, up to 10 hours of 2G talk time (compared with eight hours on the previous model), and up to five hours of 3G talk time.

“That’s actually a very large amount of 3G talk time. We’re very proud of this,” said Jobs. The phone will run for five to six hours of high-speed Web browsing and seven hours of video viewing. Music playback is good for up to 24 hours of battery life (which puts the new iPhone right alongside stand-alone iPod audio players).

Software improvements

Many of the iPhone 3G’s improvements will be found in its software tweaks, dubbed iPhone 2.0. For example, the phone will now support a slew of core features for enterprise security (including VPN and WPA wireless encryption). In addition, you can search through contacts, display iWork documents and Microsoft Office files, and save images received in e-mail to your photo library. It also offers batch delete and move support while in the e-mail app, and multilingual support.

June has arrived and for Apple fans and investors that means just one thing — a new iPhone.

The encore to the original iPhone, which launched nearly a year ago amid unprecedented industry buzz, is widely expected to be the main attraction when Chief Executive Steve Jobs takes the stage at Apple’s developers’ conference next Monday.

The new iPhone will be accompanied by support for corporate e-mail and a slate of new programs that could help boost sales of the devices, which sport a touch-sensitive screen, wireless Internet access and iPod-style media functions.

“The thing for Apple is to be able to leverage the iPhone for further innovation, or they run the risk of being the next (Motorola) RAZR, which was iconic in its own way, but for which innovation did not come fast enough,” Shiv Bakhshi, director of mobility research for market research firm IDC.

Apple has declined to comment on what Jobs will announce, but analysts are betting he will show off a long-rumored phone running on a so-called 3G, or third-generation, network.

That would address one of the chief complaints about the current iPhone: the speed at which it calls up Web pages on AT&T Inc’s pokey EDGE network.

That is a particularly important concern in Europe, which is ahead of the United States in building new networks and where sales of the iPhone have lagged.

“I see 3G as important for the U.S. but essential for overseas,” analyst Avi Greengart of Current Analysis said of a faster iPhone.

“It will be appreciated by technology enthusiasts and anybody who wants to get fast Web browsing outside the hot spots.”

A new iPhone may be a catalyst for Apple stock, which has risen 50 percent over the past three months. Investors have regained confidence that demand for the company’s computers and iPod media players is holding up amid fears the U.S. economy is headed for recession.

Inexpensive iPhone?
There is also speculation Apple could bow to a cellphone industry practice and offer a subsidized iPhone, an arrangement where AT&T could kick in a couple hundred dollars to make the devices more affordable. AT&T already gives Apple a slice of the monthly service fees it gets from iPhone subscribers.

“We think that actually Apple could talk about a very disruptive business model, or a change in their business model, embracing subsidies where necessary, multiple carriers to help get the iPhone into more hands,” Lehman Brothers analyst Ben Reitzes told a conference call last week.

But more important than the actual hardware will be new services and programs that can tap the increased power.

Some reckon that will include the ability to download songs from iTunes using the cellular network. IPhone users now have to be connected to a Wi-Fi network to get music from Apple’s online store.

Apple also likely will roll out its highly anticipated support for corporate e-mail, a capability it showed off earlier this year and that is expected to give iPhone a push into business, which now overwhelmingly use Research In Motion Ltd’s Blackberry devices.

More than a quarter of people who bought Apple Inc’s iPhone are using them on wireless networks other than AT&T’s, the exclusive iPhone carrier in the U.S., a "stunning" number that will pressure the company’s business model, an analyst said on Monday.

Bernstein Research analyst Toni Sacconaghi said analysis of sales numbers from Apple and AT&T Inc revealed about 1.45 million phones were "missing in action" at the end of 2007.

About 480,000 of those were believed to be held by AT&T as inventory, leaving another 1 million phones, or 27 percent of the total, that Sacconaghi said were "unlocked" so they could work on non-AT&T networks.

Apple executives said last week the number of unlocked phones was "significant" but declined to give an estimate. Most analysts had estimated the portion of unlocked phones at under 20 percent.

Spokespersons for Apple and AT&T declined to comment.

The higher number is worrying for Apple because the company receives a cut of AT&T’s iPhone service fees, revenue that carries a high gross margin and has fueled optimism over its earnings potential.

For example, Sacconaghi said, if Apple hit its sales goal of 10 million iPhones by the end of fiscal 2008 but 30 percent of those don’t result in any carrier payments, its revenue and profit would be $500 million and 37 cents per share lower than expected.

If Apple cracks down on unlocked phones it could preserve its high margins but miss its sales target, whereas allowing them could erode profitability and make it tough to sign more carriers to similar revenue-sharing deals.

"Besides the financial implications, we believe the prevalence of unlocked iPhones presents a significant strategic dilemma to Apple," Sacconaghi wrote.

Apple shares closed unchanged on Monday at $130.01. Over the past month the stock has fallen 35 percent on concerns over consumer spending and what some analysts say are a lack of must-have products Apple has lined up this year.