Technology convergence has a new benchmark: "Twice as fast. Half the price." That’s how Steve Jobs characterized Apple’s new 3G iPhone at its World Wide Developers Conference in San Francisco yesterday. Even its rivals were in awe. According to senior vice president of Nokia markets, Anssi Vanjoki, the new iPhone represents "…the convergence of consumer electronics, information technology and various Internet services integrated into one platform."

Steve Sechrist
Senior Analyst and Editor

To reach this new milestone, Apple finally migrated the iPhone from the slower EDGE (short for enhanced data GSM environment) to the 3G or 3rd generation wireless protocol. This includes HSPA (high speed packet access) data that uses improved modulation schemes to enhance delivery of Internet data on the fly. To underscore the speed, Jobs commented at the launch, "It’s amazingly zippy."

Along with enhanced connection speed the company also announced the 2.0 software version that allows 3rd party developers to create applications that can make calls to the core operating system, not just run on the resident Safari web browser. This upgrade will extend to all iPhone users and be offered to them at no cost, while users of the iTouch (non-phone version device) will be asked to pay a $10 upgrade fee.

Infosyncworld.com reported that among the upcoming third-party applications is a document viewer that supports MS Office applications like Word, various medical apps and other productivity tools, and games from leading gaming houses utilizing the Apple iPhone’s OpenGL and accelerometer features, like a version of Sega’s Super Monkey Ball.

What a difference a year makes in the price. Jobs announced the new iPhone will sell for $199 with 8 gigabytes of memory, compared with the original $599 price at first product launch one year ago, and the current $399 reduced price of today. The company is also offering a new 16GB version of its gen2 iPhone for $299.

Apple dropped the price of the original $600 version to $400 just two months after product launch, a move some analysts said was to kick-start sales of the new device after die-hard Apple supporters all bought their units in a frenzy that led to limited supply and in some cases back-orders, even at the higher price. To Apple’s credit, the company did send out a $100 rebate to those early adopters.

With this new lower pricing structure, speculation is now rising that the wireless providers may begin offering a subsidized iPhone package to new subscribers. But subsidized or not, the new 3G device set to hit 22 European markets in July, Apple’s new pricing should be seen as aggressive, particularly when contrasted with the relatively weak dollar / euro exchange that puts the price of the high-end, gen2 iPhone at just 189 Euro and the entry level 8MB device at a meager 126 Euro. That’s a lot of technology bang for the buck (…err, Euro.)

So watch out Nokia, Samsung, LG, RIM and Sony (oh yes Motorola too) the new kid on the block is at it again, changing the way we get our voice mail, and where and when we interact with our e-mail and the Internet. The company that brought the "computer for the rest of us" making it cool to use a PC without being a geek is gunning for smart phone market share, and you are in Apple’s sights.