Apple's iPhone: The 3G Sequel

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SAN FRANCISCO — Not every company would risk blasting Jerry Lee Lewis’ “Whole Lotta Shakin’ Going On” to a packed crowd in earthquake-prone Northern California, but Apple likes to live on edge.

The Moscone Center here was the scene for Apple’s much-anticipated rollout of its newest iPhone, kicking off its weeklong Worldwide Developer Conference (WWDC).

Steve Jobs and friends didn’t disappoint, focusing the two-hour keynote on the iPhone. The keynote audience for the sold-out (5,200 attendees) WWDC included former Vice President and current Apple board member Al Gore and a host of Silicon Valley elite.

In a session later today closed to media, Jobs said Apple (NASDAQ:AAPL) would preview details of Snow Leopard, the next version of the Mac OS X software.

So, with the iPhone taking centerstage, the big announcement was a dramatic price drop to $199 for the new standard iPhone 3G with 8GB of storage and two-year service commitment.

Unlike the earlier model, the iPhone 3G now includes a built-in GPS. “Location services are a very big deal,” Jobs said.

“The basic outward design hasn’t changed much, though the iPhone 3G is a little thinner at the edges. Proving he didn’t need to do much to win over the crowd, Jobs’ comment that the headphone jack is now flush to the side drew huge applause.

The current iPhone, which Jobs confirmed is completely sold out, had been selling for $399. Apple’s marketing campaign for the phone includes the
slogan: “Twice as fast, half the price.”

A new 16GB model costs $299 and comes in either the standard black or a new white version. Jobs said $199 for the 8GB version will be the most Apple charges for the standard model in any of the countries. Both are set for release July 11 and will be available in 22 countries with more to follow later this year

The bulk of the presentations focused on new applications and a recap of enterprise
support in the iPhone 2.0 software Apple previewed in March along with its software development kit (SDK).

According to Jobs, 35 percent of Fortune 500 companies are already participating in the beta SDK program. He said there’d been more than 250,000 downloads of the free SDK since its release in March.

But the demand is apparently proving to be a bit too much for Apple. Jobs said more than 20,000 developers had applied for the paid service whereby Apple approves applications for participation in its forthcoming Apps Store and manages the distribution, hosting and payments, taking a 30 percent cut of the sale price — though developers can also distribute free applications at no cost.

Jobs noted that Apple’s admitted only 4,000 of the 20,000 applicants so far but didn’t elaborate on the cause of the logjam.

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